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Over £22bn Worth Of Coronavirus Loans Approved

Posted 16 days ago

Over £22bn Worth Of Coronavirus Loans Approved
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To date (21st May, 2020), emergency government support schemes have channelled over £22bn in total to 505,043 businesses, new data has revealed.

This is an increase from £14bn to 300,000 firms last week.

Figures from the Treasury showed in the past week alone, lenders have provided over £7bn to businesses through the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

Bounce Back Loans allow small businesses to receive a loan worth a quarter of their turnover, up to £50,000, within as little as 24 hours.

Of 581,516 UK businesses to apply for a Bounce Back coronavirus loan, 464,393 have received the money – an 80 percent approval rate. That equates to 33,000 loan approvals each day since the scheme launched earlier this month.

But while 81,124 firms applied for coronavirus business loans of up to £5m by 17 May, just 40,564 have been approved. That gives CBILS a 50 percent approval rate, with £7.25bn lent out since its launch on 23 March.

Applications for larger coronavirus interruption loans (CLBILS) have the worst approval rate of all three schemes. Banks approved just 17.3 per cent – or 86 – of 496 large firms’ requests for loans of up to £50m.

Stephen Jones, CEO of UK Finance, said: “The banking and finance industry is committed to helping businesses get through these tough times, with over £22 billion of lending provided to almost half a million businesses through government-backed schemes so far.”

“Banks stand ready to support businesses large and small, and the changes announced by HM Treasury means firms can access loans from £2,000 to £200 million through the coronavirus loan schemes.”

“These are just one part of a range of measures from the industry available to businesses including extended overdrafts, capital repayment holidays and asset-based finance.”

Responding to this, CEO of NextFin Sacha Bright said: “Although the government is not releasing data on large loans, it's been reported that 86 large CBIL loans have been approved up to £50m each which equates to a maximum of £4.3bn. So we can assume that the government has guaranteed no more than £26.3bn worth of loans so far. 

“I am pleased that the Bounce Back Loan has been successful for small businesses. I am concerned, however, that some medium to larger businesses could be being ignored. As much as I support smaller enterprises, big businesses are major employers and provide essential contracts for small businesses. It's important we support every area of enterprise across the food chain.”

“It is a shame that the government has been so focused on loans. The Enterprise Investment Scheme Association (EISA) has proposed schemes to incentivise equity investment, which is far better for business.”

“I would like to see the government to develop creative solutions to encourage equity investment for both big and small businesses.”

Author: Sacha Bright & Oliver Murphy

Disclaimer

To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed.

Tagged: News CBILS Bounce Back Loan Covid-19



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