Northern Ireland businesses handed more than £2bn in Covid loans

Covid loans by council area. Graphic Raymond Esteban

Businesses have said without the money they may have had to close.

Covid loans by council area. Graphic Raymond Esteban

Businesses have said without the money they may have had to close.

Covid loans by council area. Graphic Raymond Esteban

Margaret Canning Twitter Email

July 06 2021 10:14 PM

Northern Irish businesses borrowed more than £2bn under the two biggest UK Government-backed Covid-19 loan schemes, it has emerged.

The British Business Bank said more than 44,400 loans had been given out to local firms under the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS).

The schemes were set up last year to give emergency funding to companies that were hit by the pandemic and lockdowns. They were in addition to other types of support such as the furlough scheme and grants.

The schemes closed to new applications at the end of March.

However, unlike grants and the funding received under the Coronavirus Job Retention Scheme , the loans do have to be repaid.

The CBILS and BBLS gave the lender a full Government-backed guarantee against the outstanding balance. The borrower always remains fully liable for the debt.

The British Business Bank, which helped run the schemes and accredited lenders to distribute the loans, said more than 42,000 loans worth nearly £1.3bn were given under the BBLS to local firms .

It provided a six-year loan from £2,000 to a maximum of £50,000.

More than 2,400 loans worth nearly £0.8bn were distributed to local businesses under the CBILS, which provided business loans, overdrafts, invoice finance and asset finance of up to £5m to businesses with a turnover of less than £45m.

Mark Sterritt, network director for Northern Ireland at the British Business Bank, said: “The Covid-19 loan schemes have been an important part of the Government’s response to the pandemic, providing businesses with much-needed breathing space and reducing cashflow concerns for many.

"We’re pleased to see evidence that they have helped smaller businesses right across Northern Ireland, and we look forward to helping more businesses to prosper and grow as we look towards economic recovery.”

Kerr’s Tyres, which has branches around Northern Ireland, said it had applied for a CBILS loan for support during the pandemic.

Even though it still had work from hauliers and delivery companies in the pandemic, it lacked working capital..

Norman Kerr, managing director of Kerr’s Tyre s said: “Before coronavirus, we’d put all our cash reserves towards building a new headquarters.

"Once the outbreak hit, not getting that financial support from the CBILS means our cashflow would’ve dried up and there’s a possibility we would have had to close.”

Senior executives from HSBC, Lloyds Bank and NatWest, the parent company of Ulster Bank, told the Treasury Select Committee last year that businesses were hoarding around £21bn of the £42bn which had been loaned under the BBLS UK-wide.

Paul Thwaite, commercial banking chief at NatWest, told the committee: “I think that demonstrates... that some customers have exercised caution, drawn down on the lending and kept it for future spending.”

Northern Ireland businesses handed more than £2bn in Covid loans

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