Small businesses borrow £18bn in three weeks under Bounce Back Loan Scheme
Small and medium-sized businesses have borrowed more than £18bn under the government’s Bounce Back Loan Scheme (BBLS) in its first three weeks of operation.
The BBLS was introduced by chancellor Rishi Sunk after criticism that the existing Coronavirus Business Interruption Loan Scheme (CBILS) was not being made accessible to many businesses by the banks administering the scheme.
The new scheme offers 100 per cent government-backed loans of up to £50,000 to small businesses, in contrast to CBILS where the government underwrites 80 per cent of the loan.
The BBLS has lent £18.5bn to 608,069 small businesses as of 24 May, up from £14.2bn by 17 May.
CBILS, which lends up to £5m, only lent £8.15bn since its launch in March.
Banks have approved about half of loan applications under CBILS so far, compared with 79 per cent for the BBLS.
Sunak initially opposed offering full state guarantees for bank lending, due partly to the risk of bad debts, but allowed it for the smallest firms after pressure from business groups, MPs and the Bank of England.
Diane Nyiry of Devon-based Cine Power International told Morning Wire: “I have been shocked at the way the banks have been behaving, they haven’t been very angelic. They seem to be capitalising on the small businesses that the chancellor very generously was trying to assist.”
When BBLS launched at the start of this month, banks reported a surge of applications for lending under the programme.
HSBC said it received 12,800 applications in the first few hours of the scheme.