Finance sector provides £5.5bn to SMEs through coronavirus lending scheme



The banking and finance sector has lent over £5.5 billion to SMEs through the Coronavirus Business Interruption Loan Scheme (CBILS) so far, according to the latest data from UK Finance.

However, Scottish Financial News reported last month that the banking body is refusing to supply a breakdown of lending by individual banks, amid suspicions that many banks are obfuscating the delivery of the business loans. It is known that over 50% of the lending has come from the taxpayer-owned RBS alone.

Almost £1.4 billion worth of loans were provided in the week from 29 April to 6 May as lending under the scheme continues to grow. The number of approved loans grew by a third over the same period, increasing by 8,550 to 33,812.

The British Business Bank approved ten more lenders for accreditation under the CBIL scheme this week, bringing the total number of accredited lenders to 63. This means businesses can access financial support under CBILS from an even wider variety of firms, from high street banks to alternative finance providers.

Lenders have received 62,674 completed applications under the CBIL scheme so far. 33,812 of these applications have been approved to date, while more applications are still being processed and are expected to be approved over the coming days.

These latest figures come in the same week as the launch of the Bounce Bank Loans (BBL) scheme, which has made it simpler and quicker for lenders to provide smaller businesses and sole traders with financial support. Figures4 published by HM Treasury yesterday revealed that 69,000 Bounce Back Loans worth over £2 billion were approved during the first 24 hours of the scheme, highlighting the hard work of bank staff to help viable businesses of all sizes access the finance they need.

Lenders have put in place a wide range of additional measures to help SMEs get through these tough times, including working capital extensions, overdraft extensions and capital repayment holidays.

Stephen Jones, chief executive of UK Finance, said: “The banking and finance industry is committed to helping viable businesses of all sizes get through these tough times.

“Bank staff have worked tirelessly over the past week to provide businesses with the finance they need, delivering another £1.4 billion of lending under the CBIL scheme, on top of over £2 billion in Bounce Back Loans targeted at smaller firms and sole traders.

“This forms part of the industry’s broad package of tailored support for SMEs, with thousands of other businesses having their existing overdrafts increased, accessing new loans and asset-based finance or receiving capital repayment holidays on existing facilities.”

He added: “It’s important to remember that any financing provided under the CBIL or BBL schemes is a debt not a grant, and so firms should carefully consider their ability to repay before applying.”

Commenting on the announcement, Siren Thiru, head of economics at the British Chambers of Commerce (BCC), said: “Although the steady improvement in the number of firms accessing CBILS is welcome, with many firms only having a few months’ cash in reserve the pace of delivery remains disappointingly slow.

“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.

“The current template for Bounce Back loans could be used the improve the provision of the CBIL scheme, including adopting an easier and more consistent application process.

“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.”

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