Banks are giving out fewer Coronavirus Business Interruption Loans (CBILs) as time-consuming steps slow down the processing of the SME emergency help.

The number of loans approved in the week from 21 April to 28 April was 8,638, down from more than 9,000 the previous week. Of the 52,807 loans that businesses applied for, almost 28,000 have not yet been approved.

During the same week, starting 21 April, more than £1.33bn of loans was approved, down from £1.45bn in the previous seven days.

The CBILS provides financial support to smaller businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

Interest in the scheme remains high, with hundreds of businesses contacting their banks in an attempt to participate. However, there have been many reports of businesses having difficulties accessing the scheme, and an outcry against some banks for not, apparently, being more supportive.

The banks, in turn, have blamed the heavy workload, the need to complete the necessary credit checks and a shortage of staff.

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“Staff are working incredibly hard to get money to those viable businesses that need it,” said Stephen Jones, chief executive of UK Finance, the trade body for the banking and financial services sector.

The new Bounce Back Loans scheme

The government has been under mounting pressure to speed up the covid-19 emergency banking lending.

On Monday, the Chancellor of the Exchequer, Rishi Sunak, announced a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders.

Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.

Under this scheme, businesses will be able to borrow between £2,000 and £50,000 and access the cash within days. Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form.

Of the scheme due to launch on Monday 4 May, the Chancellor of the Exchequer said:

“The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.”