| 13.6°C Belfast

Covid-19 loans slow as another £1.3bn handed to small businesses

Last week UK Finance reported that around £1.45 billion in small business loans had been approved.

Close

Chancellor of the Exchequer Rishi Sunak has promised 100% government-backed loans to small businesses. (Yui Mok/PA)

Chancellor of the Exchequer Rishi Sunak has promised 100% government-backed loans to small businesses. (Yui Mok/PA)

Chancellor of the Exchequer Rishi Sunak has promised 100% government-backed loans to small businesses. (Yui Mok/PA)

Small business across the UK have won another £1.33 billion of support as part of the Government’s scheme to help companies weather the economic storm brought by coronavirus.

Nearly 8,640 new loans were approved in the seven days to Tuesday, according to figures from UK Finance, released on Thursday.

According to the trade body, it brings the total lent under Chancellor Rishi Sunak’s coronavirus business interruption loan scheme (CBILS) to £4.1 billion.

However, the data also shows the rate of approvals slowed from last week, when UK Finance said £1.45 billion had been approved in the previous seven days.

It is the first time the rate has slowed since the scheme started.

Almost 53,000 completed applications have been sent to lenders and just over 25,000 have been approved.

British Chambers of Commerce head of economics Suren Thiru said: “While the number of firms accessing CBILS is on an encouraging upward curve, a concerningly high number of firms continue to struggle to access this crucial lifeline.”

Some of the UK’s biggest banks have started releasing their own figures this week.

Lloyds said it has lent around £410 million under CBILS, HSBC has lent £765.2 million, Barclays £738 million, and RBS £1.4 billion. Together they account for around £3.3 billion of the £4.1 billion total.

UK Finance chief executive Stephen Jones said: “The banking and finance sector recognises the role we must play in getting the country through these tough times, and staff are working incredibly hard to get money to those viable businesses that need it.”

On Monday officials promised that small businesses will be able to get a 100% Government-backed loan of up to £50,000 to help them bounce back from the crisis. The Government will pay the interest on these loans for the first year.

“For smaller firms, the 100% guaranteed loan should help give sole traders, micro firms and entrepreneurs a simple route to fast finance to help them stay afloat from next week,” said Rain Newton-Smith, chief economist at the Confederation of British Industry.

“The financial strain on businesses cannot be underestimated though, and with more businesses applying for loans the banks must continue to be responsive to concerns and work at full speed to deliver the scale of support needed.”

PA