£57bn provided to SMEs through government schemes
Accredited lenders have provided £57.31bn to 1.33 million businesses through the government’s emergency loan schemes.
Data from the Treasury showed the bounce back loan scheme (BBLS) remained the most popular scheme with 1.3 million businesses accessing £38.02bn through this route up to 20 September.
This was followed by 66,585 firms receiving £15.24bn through the coronavirus business interruption loan scheme (CBILS) and 566 companies receiving £3.84bn through its larger counterpart, the coronavirus large business interruption loan scheme (CLBILS).
Figures have indicated a small uptick in loan approvals ahead of expected upcoming deadlines. CBILS was due to close for applications on 30 September, CLBILS to finish on 20 October and BBLS to end on 4 November, however yesterday it was revealed that the chancellor is reportedly set to extend the schemes.
From 16 August to 20 September the schemes have collectively supported an additional 90,000 firms with £4.66bn.
However, the percentage of firms that have been approved for funding is still low.
CBILS carries an approval rating of around 47 per cent and just over half of companies (57 per cent) were approved for CLBILS.
Meanwhile, the majority of businesses applying for BBLS accessed funding through the scheme (81 per cent).
“The latest data from the Treasury on the coronavirus business loan schemes – showing an increase of £4.7bn of approved loans across the three schemes over the past month to a total of just over £57bn – highlights the ongoing demand from UK firms for emergency funding to help them survive during these difficult times,” said Charlotte Crosswell, chief executive of Innovate Finance.
“Non-bank lenders have played a vital role in providing finance and emergency loans to small – and medium-sized enterprises (SMEs) in particular throughout the Covid-19 crisis.
“The immediate future is still uncertain, and we will no doubt continue to see an increasing demand from new companies seeking loans, in addition to existing businesses looking to refinance.
“We will therefore need to take a holistic approach to demand for SME loans, and deploy a wide range of lenders to sustain the trajectory of economic recovery.
“This will give opportunities for banks and non-banks to work in tandem to continue lending in this uncertain environment, and over time create conditions that support job creation, economic recovery and UK competitiveness.”
The Treasury data also showed that the future fund, which offers innovative companies convertible loans from the government, has provided £588.3m through 590 convertible loans up to 16 August.
This represents a rise from £562.3m through 565 convertible loans the week before.
Nearly two-thirds (65 per cent) of firms applying for the fund were approved for the government funding.
Four peer-to-peer lending platforms have been accredited to provide CBILS. These comprise Assetz Capital, LendingCrowd, Folk2Folk and Funding Circle, which was also approved to offer bounce back loans.
Several P2P platforms have also been utilising the future fund.
Propio has raised £278,000 in total from its funding round and the government’s future fund to prepare for its delayed launch into P2P lending this Autumn while Assetz is aiming to raise up to £1.5m through the fund matching its private fundraising, in order to grow and scale.
