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UK Government's Covid-19 loan scheme approves over £31bn in lending to firms

Written by  Jun 02, 2020

A flagship UK Government Covid-19 support scheme has seen lenders approve more than £31bn in loans.

The various Covid-19 loan schemes, administered by the UK Government ran British Business Bank, it has seen accredited lenders approve in the last week alone £3.8bn to 94,000 firms. More applications have been received and are expected to be approved in the coming days.

Since the launch of the first coronavirus support scheme in late March, over 745,000 facilities have been approved by lenders through the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS) in a little over two months.

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 In comparison, an average of 275,000 loans and overdrafts were provided in total each year by the ten largest banking groups to UK SMEs over the past five years

According to latest Treasury figures as of 31 May, lenders have provided £21.3bn through BBL an increase of £2.8bn over the past week. Over 91,000 applications were approved in the past week. BBLS provides funding of up to £50,000.

Lenders have approved £8.9bn in finance through CBILS to almost 46,000 businesses. This is an increase of over £750m since data was last published. The scheme provides lending of up to £50m for firms whose annual revenues don’t exceed £45m.

Under CLBILS the number of businesses that have received financial support increased by 191, totalling just over £1.1bn. Funding is up to £200m.

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The Treasury has yet to breakdown the figures for the nations of the UK. However, based on a firm per head of population, that could see funding approval of around £1.5bn into Welsh firms.

Stephen Jones chief executive of UK Finance, the representative body for the UK’s financial services sector said:“These figures show that the banking and finance sector is committed to playing its part in helping businesses across the UK through these tough times.

“The amount of support available to firms affected by the Covid-19 crisis is unparalleled. Over £31bn has been approved in government-backed lending schemes so far to almost 750,000 businesses, with a further £19bn drawn under bank-arranged commercial paper facilities.

“But UK Government-backed loans are not the only support the banking and finance sector has made available. Over the last few months, lenders have put in place a clear plan to support businesses in every region of the country, including through offering extended overdrafts, capital repayment holidays and asset-based finance to businesses that need support.

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“It’s important to remember that any lending provided under government-backed schemes is a debt not a grant, and so firms should carefully consider their ability to repay before applying.”

Within the Welsh Government’s emergency £500m Economic Resilience Fund, some £100m was provided to the Development Bank of Wales in March for its Covid-19 loan scheme, which is providing funding of up to £250,000 for firms trading for at least two years.

To date some £70.3m of funding has been drawn down across 1,155 investments. Firms that have approved funding offers, have until the end of June to do so.

The development bank said it was working on a number of scenarios, although not disclosing what they were, if an element of the fund wasn’t drawn down.


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Peter Flynn

Senior Editor and self confessed techie, bringing a variety of topical business tech news, help and advice in the UK. I have worked in various fields throughout my career such as a Systems Administrator, Security Consultant and other technical related roles, these days I concentrate on IT journalism and technical writing.

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