Government-backed coronavirus lending tops £50bn
Banks have now lent £50.7bn to companies through the various government-backed coronavirus loan schemes, official figures showed today.
By far the biggest programme is the bounce back loans scheme (BBLS), which had seen banks lend out £34.34 to small businesses as of yesterday, the Treasury said. It comes with a 100 per cent government guarantee and the loans can be up to £50,000.
Companies have borrowed £13.08bn from banks under the coronavirus business interruption loan scheme (CBILS), which carries an 80 per cent government guarantee.
The CBILS scheme has an 80 per cent government guarantee and loans can be up to £5m. Yet the approval rate is still only around 50 per cent.
Business groups hope that recent changes to EU state aid rules will boost lending through CBILS. The rules had prevented some highly indebted or big-spending but viable firms from accessing loans. The changes only came into force on 30 July, however.
Banks have now lent out £3.27bn through the coronavirus large business interruption loan scheme (CBILS). It too has an 80 per cent guarantee but the loans can be up to £200m.
Figures from HMRC showed that more than 9.6m people have been furloughed through the job retention scheme. The government has paid out £33.8bn in wages to people who may otherwise have been laid off.
HMRC does not provide figures on how many people are currently on furlough, however.
Business call for help amid rising cases
The figures came days after the government postponed the next stage of reopening the economy due to a rise in coronavirus cases. Venues such as casinos and bowling alleys are to remain shut and test runs of audiences in sports arenas will be cancelled.
Business groups have raised concerns that firms could need more targeted help if coronavirus restrictions are reintroduced.
Matthew Fell, chief UK policy director at the CBI, said: “Delayed reopening will unfortunately lead to even more financial pressure for some companies.
“So there may yet be a need for more direct support to shore up cash flow, including extended business rates relief.”
The government’s loan schemes are due to end in the autumn. CBILS is set to close at the end of September and BBLS is due to finish in November. The government retains the right to extend the schemes, however.