RBS pays out 70 per cent of government coronavirus loans
The vast majority of the emergency coronavirus cash being doled out to small businesses has come from the Royal Bank of Scotland (RBS), the lender has revealed.
Taxpayer-backed RBS has so far approved 2,500 loans — roughly 70 per cent — under the government’s coronavirus business interruption loan scheme (CBILS), the Sunday Telegraph reported.
The CBILS programme — a key part of the government’s £330bn coronavirus lending pledge — offers loans via banks to small businesses with turnover of up to £45m.
But RBS is said to be the only major bank offering loans worth less than £25,000. Lloyds and HSBC have both said they are looking to make the scheme available to businesses seeking a loan of under £25,000.
It comes amid criticism that thousands of small businesses are struggling to access the cash they need to survive the economic downturn sparked by the pandemic.
Small business owners have reported that the service is not working properly, with banks too slow to provide loans.
Adam Leon, managing director of recruitment firm Orlik Leon in Bath, said the slow pace of the CBILS application process meant he had to take out an overdraft from his bank Barclays to tide him over until he received his loan.
“When I approached the bank I was told the process would take two-to-three weeks,” he told City A.M last week.
“Today I was told I will be lucky if I get it in four-to-five weeks. As a result the bank has offered me an overdraft which I had to sign a personal guarantee for to get through the eight-week period.”
Tory MP Kevin Hollinrake, who co-chairs the all party parliamentary group on fair business Banking, has written to chancellor Rishi Sunak calling for “rapid improvements” to the scheme.
“It is good to hear that businesses can use CBILS for loans as little as £1,000, but this is not the experience of those businesses that we speak to,” he wrote.
Former business secretary Greg Clark has also called for a rethink of the programme, telling Morning Wire it had been a “disappointment”.
Sunak has already overhauled the scheme once following complaints from businesses that the terms were too stringent.
UK tech bosses have also written to the chancellor warning the country’s thriving tech sector was under threat as fast-growth firms including Deliveroo and Citymapper were ineligible for the government’s support package.