UK lenders have approved £27.5bn to more than 650,000 businesses so far through the three major government-backed lending schemes.
The loans were provided through the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
In the past week alone, more than £5.4bn in lending has been provided to over 146,000 firms through government-backed lending schemes.
The lenders’ action is “part of the industry’s plan to get Britain through these challenging times,” says UK Finance, the banking industry’s trade body.
The Bounce Back Loan Scheme
The Bounce Back Loan scheme is aimed at sole traders and micro businesses. The scheme has seen £18.45bn provided by lenders, of which £4.3bn were approved in the last week—an average of £615 million each day.
The number of loans agreed through the scheme has increased by over 143,000 to 608,000.
The Coronavirus Business Interruption Loan Scheme
The industry has supported 43,000 businesses through the CBIL scheme with £8.2bn in lending. 154 larger firms have received finance via the CLBIL scheme, totalling £820m.
Across the two schemes, this amounts to an increase of £1.1bn over the past week, with more lending set to be approved over the coming days.
The British Business Bank has accredited six more lenders for the CBIL scheme, giving firms a wide range of choice of more than 70 institutions from high street banks to alternative finance providers.
Following changes announced by the government, businesses are now able to borrow up to £200m under the CLBIL scheme.
“These are not grants, but loans to be repaid”
UK Finance noted that the industry is also providing working capital facilities, overdraft extensions, 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,” said Stephen Jones, Chief Executive of UK Finance.
A failure to do so could impact their credit file, he added.