UK’s banking and finance sector is taking the necessary steps to helping British businesses pick up the pieces
UK’s banking and
finance sector is taking the necessary steps to helping British businesses pick
up the pieces
As the coronavirus pandemic continues to sweep the world, businesses across the UK are currently facing detrimental impacts on their operations amid the nationwide shutdown. Now, the UK’s banking and finance sector is lending a helping hand to businesses during these tough times. Lenders are backing 750,000 British businesses with more than £31 billion through COVID-19 loan schemes, the Treasury has revealed.
According to new figures released by the Treasury on Tuesday, lenders have approved over £31.3 billion to over 745,000 businesses through government-backed schemes implemented over the past few months. In the past week alone, more than £3.8 billion in lending has been provided to 94,000 firms through these schemes. More applications have been received and are expected to be approved in the coming days.
The loans have been approved by lenders through the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CBILS) in a little over two months, since the first coronavirus support scheme was launched in late March. This shows the unparalleled levels of support provided by the UK’s banking and finance sector during this difficult time. In a stark comparison, the ten largest banking groups provided UK SMEs with an average of 275,000 loans and overdrafts per year over the past five years – which goes to show how the finance industry is truly stepping up its efforts.
As of 31 May, lenders have provided £21.3 billion through the Bounce Back Loan Scheme (BBLS), an increase of £2.8 billion over the past week. Over 91,000 applications were approved in that same week. Lenders have approved £8.9 billion in support through the Coronavirus Business Interruption Loan Scheme (CBILS) to almost 46,000 businesses, an increase of over £750 million since data was last published.
SMEs have also received more support through the CBILS, and the number of small and medium businesses receiving loans has increased by 191, totalling just over £1.1 billion. These government-backed schemes are just part of the banking and finance sector’s plan to help businesses in the UK through the coronavirus crisis. This includes supporting businesses through working capital extensions, overdraft extensions, capital repayment holidays and asset-based finance, allowing businesses to access the support that is most appropriate to their needs.
“These figures show that the banking and finance sector is committed to playing its part in helping businesses across the UK through these tough times,” Stephen Jones, Chief Executive of UK Finance, said. “The amount of support available to firms affected by the Covid-19 crisis is unparalleled. Over £31 billion has been approved in government-backed lending schemes so far to almost 750,000 businesses, with a further £19 billion drawn under bank-arranged commercial paper facilities.
“But government-backed loans are not the only support the banking and finance sector has made available. Over the last few months, lenders have put in place a clear plan to support businesses in every region of the country, including through offering extended overdrafts, capital repayment holidays and asset-based finance to businesses that need support.
“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.”
As businesses are struggling to stay afloat during the pandemic, the UK’s banking and finance industry is taking necessary steps to help businesses bounce back during this difficult period.