Credit, Collections & Insolvency News
The banking and finance sector has provided over £2.8 billion of lending to SMEs so far through the Coronavirus Business Interruption Loan Scheme (CBILS), as part of a broad package of support for UK businesses, according to the latest data published by UK Finance.
Total lending under CBILS has doubled in the week from 14 April to 21 April, with an increase of £1.45 billion. Over 9,000 loans have been provided in the same period, with the total number approved increasing by almost 120 per cent to over 16,600.
Lenders have received over 36,000 completed applications2 so far. 16,624 of these applications have been approved to date, while others are still being processed and may be approved over the coming days.
Bank staff are working hard to help viable businesses access the support they need to get them through these challenging times. Over half the total number of loans provided through CBILS have been approved in the past eight days alone.
In addition to the finance being made available through CBILS, lenders continue to provide capital repayment holidays, overdrafts and working capital extensions to help businesses manage their costs where these arrangements are appropriate.
The industry has also taken steps to give additional support to those businesses who are furloughing their employees. Where possible, lenders will look to provide support to firms that have successfully applied for the Coronavirus Job Retention Scheme to help them manage their cashflow while they await receipt of a grant from the scheme.
Stephen Jones, Chief Executive of UK Finance, said “The banking and finance sector understands the critical role we have in helping businesses through these tough times.”
“Frontline staff have been working tirelessly to get money to those viable businesses that need it as quickly as possible, with over £2.8 billion of lending provided to 16,000 firms so far. This lending forms part of a broad package of support provided to SMEs including additional loans, capital repayment holidays, extended overdrafts and asset-based finance.”
“We know businesses want to look after their most important resource – their people – and so lenders are offering additional support to firms awaiting grants from the Coronavirus Job Retention Scheme.”
“We stand ready to support many more businesses in the weeks ahead, and will continue to work closely with the government to ensure businesses can access the support they need.”
Responding to the figures Federation of Small Businesses (FSB) National Chairman Mike Cherry said “These figures mark an improvement. But we need to see far more from the banks where the speed of processing applications and making money available to the smallest businesses are concerned.”
“The average value of a CBILS loan stands at more than £170,000. The case studies presented by UK Finance today all concern firms that have managed to secure big facilities. The small shops, restaurants, gyms, manufacturers and mechanics at the heart of our communities are not seeking loans of anywhere near this size.”
“The Government should up its guarantee on emergency loans with values under £30,000 from 80% to 100%. That, combined with the streamlined application process that should be in place for facilities of this size, should help to get more cash to the small firms that really need it. We appreciate that many banks need to make backroom adjustments to facilitate commercial loans worth under £25,000 due to the Consumer Credit Act. It’s important that these adjustments are made swiftly.”
“We now need to know how many micro businesses have been helped by the scheme to date. Firms deserve to know what the application process looks like at every stage at every approved lender. Banks should also be publishing decline rates.”
“We continue to hear from small firms that made enquiries when this scheme launched but have still been unable to make an application because of unresponsive customer service teams. For those that have made an application, the process is very slow.”
“Equally, we’ve heard from exporters that have been declined facilities on the basis that the majority of their revenue comes from international sales. It seems this was the result of overzealous interpretations of guidelines, and we appreciate the British Business Bank’s efforts to provide clarity in this area.”