UK has now approved £46.7bn of coronavirus business loans
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British businesses have now accessed £46.7bn of loans through the government’s package of emergency coronavirus support schemes.
New figures released today showed that £31.70bn of bounce back loans -lending of up to £50,000 which the government 100 per cent underwrites – have now been approved for 1.05m businesses.
A further £11.85bn to 54,538 businesses has been borrowed through Rishi Sunak’s original Coronavirus Business Loan Scheme (CBILS), which sees the government undewrite 80 per cent of loans up to £5m.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) – loans up to £200m for large businesses – has facilitated £2.73bn of borrowing for 412 businesses.
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A further £419.6m was borrowed through the Future Fund, which is aimed at high-growth start-ups.
The government’s original CBILS scheme was plagued by a slow and laborious approvals process, with many complaining early in the coronavirus crisis that loans were not being provided quick enough.
Banks carried out stringent checks to see if companies applying would be viable in the long-term as the government took 80 per cent of the default risk and not all of it.
The bounce back loan scheme was introduced as a way for banks to approve loans far quicker for small businesses, with the government taking on all of the default risk.
The new figures come as the Office for National Statistics (ONS) revealed that the UK economy grew by 1.8 per cent in May, which was much less than economists expected.
UK GDP plummeted by a record 20.3 per cent in April thanks to the Covid-19 lockdown, however experts predicted a 5 per cent rebound in May.
May’s figures were “a disappointing first step on the road to recovery,” said Thomas Pugh, UK economist at consultancy Capital Economics.