More than £40 billion has been lent under four Government loan schemes designed to prop up businesses during the coronavirus pandemic.
The Treasury has revealed bounce back loans from banks to firms hit £28.1 billion up to June 21 for 921,229 businesses, from 1.12 million applications. The loans are 100% guaranteed by the taxpayer.
It added that 9.2 million jobs were covered by the furlough scheme, operated by HM Revenue and Customs, with 1.1 million businesses claiming a total of £22.9 billion up to June 21.
Our support schemes continue to deliver for people & businesses up & down the country. The latest figures show:— HM Treasury (@hmtreasury) June 23, 2020
📊 Over Â£28bn for small business through Bounce Back loans
🏭 More than 9 million jobs protected with CJRS
â 49.5k interruption loan approvalshttps://t.co/SS9cSptcZ2 pic.twitter.com/wQJ2uL8FAS
A separate coronavirus business interruption loan scheme (Cbils), which the Government launched before the bounce back scheme, reached £10.53 billion to 50,482 businesses, with the taxpayer guaranteeing 80% of the loan.
A third coronavirus large business interruption loan scheme (Clbils) for bigger firms unable to access the Bank of England’s own lending scheme lent £2.1 billion to 315 firms, and a further £236.2 million in loans were given out as part of the Government’s Future Fund.
The furlough scheme closed to new applications earlier this month, and employers will need to start making compulsory contributions to the scheme from August to cover National Insurance and pensions contributions.
By the end of October the scheme will end, leading to businesses and unions urging the Government to lay out plans for avoiding mass unemployment later in the year.
Businesses have been forced to rely on Government handouts to stay open during the Covid-19 crisis, as attempts to stop the spread of the disease forced them to send their staff home and close their doors.
Chancellor Rishi Sunak promised to do whatever it takes to support the British economy through the lockdown period, after the Government ordered people to stay inside in March.
The Bounce Back Loan Scheme has proved the most popular, primarily because the level of checks is minimal and banks, who are lending the cash, feel secure in the knowledge that any default will be covered by the Government.
It allows a business to take a loan of up to £50,000 with a 100% Government guarantee, although there are already fears that the scale of the defaults could be substantial.
Ministers are hoping that with non-essential shops in England allowed to reopen last week, plans for pub reopenings on July 4 due and an expected relaxation of social distancing from two metres to one metre, businesses will be able to recover without scarring to sections of the economy.