Bounce back loans dominate as lenders fund £27.5bn of coronavirus business support

Lenders have approved £27.5bn of emergency finance to businesses during the coronavirus crisis with most coming from the bounce back loans scheme, government figures show.

Treasury data as of 24 May showed more than 650,000 businesses have accessed coronavirus-linked finance schemes.

The coronavirus business interruption loans scheme (CBILS), which launched in April offering loans worth up to £5m, has provided £8.1bn of finance to 43,045 businesses out of 84,607 applications.

This is an approval rate of 50.8 per cent.

Read more: Bounce back loans ‘outperforming’ CBILS

Its larger equivalent, dedicated to loans worth up to £200m, has provided £820m of facilities to 154 firms out of 502 applications, giving an approval rate of 30.6 per cent.

In contrast, the bounce back loan scheme – which provides smaller firms with loans of up to £50,000 – has an approval rate of 79 per cent and has provided £18.49bn of lending to 608,069 borrowers out of 769,137 applicants.

Stephen Jones, chief executive of banking trade body UK Finance, said the sector has a clear plan to help businesses get through these tough times.

“Businesses can also access a wide package of support measures as part of the industry’s plan, including extended overdrafts, capital repayment holidays and asset-based finance,” he said.

“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.”

Peer-to-peer lenders Funding Circle and Assetz Capital are accredited to provide CBILS finance and Funding Circle is preparing to offer bounce back loans.