Government-backed loans reach 1m milestone
More than one million small- and medium-sized enterprises (SMEs) have now been funded by government-backed loans such as the coronavirus businesses interruption loans scheme (CBILS).
According to trade body UK Finance, over the past three months the number of loans approvals has been 14 times higher than the average quarterly total of loans and overdrafts provided to SMEs in previous years.
“These figures shine a light on the unprecedented levels of support from lenders to help get businesses through these challenging times,” said Stephen Pegge, managing director of commercial finance at UK Finance.
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“The fact that over one million businesses are receiving support through the coronavirus loan schemes is a credit to bank staff up and down the country who have worked tirelessly to get finance to those who need it.
“Almost £43bn has now been approved through these schemes, in addition to the industry’s broad package of support for businesses including overdraft extensions and capital repayment deferrals.”
Three government-backed lending schemes launched in March to offer relief to businesses struggling with the economic impact of the coronavirus pandemic and UK-wide lockdown.
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To date, almost 1.02m facilities worth £42.9bn have been approved through the CBILS, the bounce back loan scheme and the coronavirus large business interruption loan scheme (CLBILS). This means that one in six of the UK’s 5.9m private sector businesses have now benefited from government-backed loans since the start of the pandemic.
Bounce back loans have offered the most relief to SMEs, with £29.5bn being distributed to more than 967,000 businesses. Meanwhile, the CBIL scheme has distributed £11.1bn to more than 52,000 businesses, and CLBILS loans have seen £2.3bn sent to 359 firms.
According to UK Finance analysis, over the past five years the ten largest banking groups have approved an average of 275,000 loans and overdrafts each year to UK SMEs – equivalent to 70,000 facilities every three months.
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