Credit, Collections & Insolvency News
Latest figures published by HM Treasury today show that the banking and finance industry has approved over £22 billion in loans to more than half a million (505,040) businesses so far through the three major government-backed lending schemes.
In the past week alone lenders have provided over £7 billion to businesses through the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS). Bank of England data shows that this is around seven times the average weekly value (£1 billion) of all new loans approved for SMEs in the year to February 2020.
The number of accredited lenders under the schemes continues to rise. Businesses can now access finance through CBILS from nearly 70 providers and BBLS from 17 lenders, giving firms a wide range of choice from high street banks to alternative finance providers.
Stephen Jones, CEO of UK Finance, said “The banking and finance industry is committed to helping businesses get through these tough times, with over £22 billion of lending provided to almost half a million businesses through government-backed schemes so far.”
“Banks stand ready to support businesses large and small, and the changes announced by HM Treasury means firms can access loans from £2,000 to £200 million through the coronavirus loan schemes.”
“These are just one part of a range of measures from the industry available to businesses including extended overdrafts, capital repayment holidays and asset-based finance.”
“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.”
Additionally, the government will extend its maximum loan size available through the Coronavirus Large Business Interruption Loan Scheme (CLBILS) from £50 million to £200 million from next week (HM Treasury). The expanded loans, which have been introduced following discussions with lenders and business groups, will be available from 26 May.
The changes also means companies receiving help through CLBILS and the Bank of England’s Coronavirus Corporate Financing Fund (CCFF) will be asked to agree to not pay dividends and to exercise restraint on senior pay.
Responding to the announcement, Stephen Jones, CEO of UK Finance, said “Ensuring businesses of all sizes access the financial support they need during these tough times is a common goal shared by Government, banks and regulators. The banking and finance industry welcomes HM Treasury’s reforms to CLBILS, extending the maximum loan size available from £50 million to £200 million to help support larger business affected by coronavirus alongside the Bank of England’s Coronavirus Corporate Financing Fund (CCFF).”
“Over the last seven weeks, the industry has worked tirelessly to get money to those viable businesses that need help with firms and sole traders of all shapes and sizes accessing billions of pounds in loans. These government-backed schemes are just one aspect of the range of measures available to businesses from the banking and finance sector. The extensive support includes working capital extensions, overdraft extensions, capital repayment holidays and asset-based finance, allowing businesses to access the right support that suits their needs. We stand ready to support many more customers in the weeks ahead.”