New figures released by the Treasury have revealed that under the bounce back loan scheme £35.5bn was approved across 1.17 million facilities for small companies.

Over 60,400 businesses impacted by the coronavirus pandemic have been approved for Coronavirus Business Interruption Loan Scheme (CBILS) packages, worth £13.7bn

In a version of this scheme for large companies, £3.5bn was lent to 516 firms.

All three of the UK Government’s schemes include taxpayer guarantees to give lenders confidence to support companies hit by the economic fallout of COVID-19.

The colossal scale of government support and lending has led to concerns about the impact of large debts on the longer-term viability of businesses across the UK.

Stephen Pegge, managing director of commercial finance at UK Finance, said that it is 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.

He added: “The government-backed coronavirus lending schemes operate alongside commercial lending, capital repayment holidays, extended overdrafts and invoice finance facilities. They are just one element of the broader strategy for supporting the nation’s enterprises.”

A report published in June from EY and The City UK predicted that UK SMEs will accumulate about £100bn worth of unsustainable debt by March 2020.

As a result, the government is being urged to consider measures such as converting debt into equity and allowing repayment holidays for the debt schemes to limit the impact of potential bad debts arising from the state-backed support schemes.