Barclays receiving 35 applications a minute for bounce back loans
Barclays has received 35 loan applications per minute this morning for the newly launched bounce bank loan scheme, according to the bank’s UK boss.
Barclays Bank UK chief executive Matt Hammerstein told a House of Commons committee today that his bank received received 200 applications within minutes of the emergency scheme opening at 8am.
The government’s bounce back loans scheme provides micro business loans worth 25 per cent of turnover, up to £50,000, just 24 hours after applying for them.
The loans are 100 per cent guaranteed by the Treasury, meaning the government takes all the default risk.
The minimum loan amount is £2,000 and there is a flat interest rate of 2.5 per cent, with the government paying the first 12 months’ interest.
Chancellor Rishi Sunak said banks would not have to undertake “forward-looking viability checks”.
Hammerstein told the Treasury Select Committee that the loan applications to Barclays were being approved within minutes.
“We’ve seen applications of about 35 per minute even as we sit here during this session,” he said.
“I think there will be extraordinary demand, recognising the severity and breadth of the impact of this crisis among smaller businesses in particular.”
David Oldfield, group director and chief executive of commercial banking at Lloyds Bank, said his firm had received 2,000 applications within the first two hours of the scheme’s opening.
“We expect significant volume through the bounce back loans,” he said.
“The whole scheme is built around simplicity, so there’s a simple two or three page online application that asks for business details, turnover and amount being requested.”
The new scheme was announced by Sunak last week after the government’s £330bn coronavirus business interruption loan scheme (CBILS) has come under fire for being too slow.
Many businesses have struggled to access emergency funding under the scheme.