Banks blasted over ‘disappointingly slow’ pace of lending as coronavirus loans hit £5.5bn
Banks have lent over £5.5bn to SMEs through the CBILS scheme but a leading industry body has said the process is still too slow.
The British Chambers of Commerce (BCC) said the improvement in the number of firms accessing CBILS is welcome. However, head of economics Suren Thiru said that with many firms “only having a few months cash in reserve the pace of delivery remains disappointingly slow.”
UK Finance data shows £1.4bn worth of loans were provided in the week from 29 April to 6 May, bringing the total to £5.5bn. But of the 62,674 received applications under the scheme, just 33,812 have been approved.
“Government must also be ready to further expand the existing grant schemes to ensure that as many businesses as possible get access to the support they need,” Thiru added.
Small firms have said they were shut out of the CBILs scheme due to inconvenient application and strict criteria.
As a result, chancellor Rishi Sunak introduced the bounce back loan scheme this week to iron out these issues. So far the scheme has approved more than 69,000 loans equating to over £2bn.
The new loan scheme offers the UK’s smallest firms loans worth 25 per cent of turnover, up to £50,000. The loans are 100 per cent guaranteed by the government.
Thiru said: “The strong start made by the Bounce Back loan scheme is encouraging for the smallest businesses that are struggling to stay afloat. However, more needs to be done to ensure that all businesses get access to the finance they need.”
He added that the current template for the bounce back loans should be applied to CBILs, “including adopting an easier and more consistent application process.”