Lending through key UK coronavirus schemes tops £52bn
Bank lending to struggling businesses through the government-backed coronavirus lending programmes has topped £52bn, figures today showed.
The bounce back loan scheme (BBLS), under which the government backs 100 per cent of loans up to £50,000, has seen by far the most use. Treasury figures showed £35.5bn had been lent out through the programme by 16 August.
The coronavirus business interruption loan scheme (CBILS) has seen banks lend out £13.7bn to struggling firms. Yet the approval rate remains below 50 per cent, with 122,900 applications and 60,400 loans.
CBILS lets banks lend out sums of up to £5m to companies. The government backs 80 per cent of the loans.
The Treasury’s figures also showed that recent changes to EU state aid rules have had little effect on the number of loans.
Business groups had complained that highly indebted companies or those that were fast-growing and burning through capital were excluded from CBILS by EU rules that stopped banks lending to “undertakings in difficulty”.
EU state aid rules have little effect
But those rules were changed by the EU and put into force by the UK authorities at the end of July.
Since then, however, lending has stuck to the previous trend. It grew £270m in the week to 16 August and £330m the previous week.
Under the coronavirus large business interruption loan scheme (CLBILS) scheme, £3.5bn has now been lent out to 516 companies.
Stephen Pegge, director of commercial finance at banking body UK Finance, said: “The bounce back loan scheme continues to be a vital element of the industry’s support package, supporting nearly 1.23m small and micro businesses across the UK.”
“The UK’s banking and finance industry remains committed to supporting the nation’s businesses through these challenging times.”
Figures released today by HMRC showed that by 9 August, 9.6m jobs had been supported by the coronavirus job retention scheme.
The programme, which pays 80 per cent of the wages of workers who may otherwise be laid off, has helped 1.2m business at a cost to the government of £34.7bn.