A total of 25,000 SMEs have now made successful applications for business interruption funding, as lenders approved more than 8,500 new loans this past week.
Statistics released this morning by UK Finance show the banking and sector has now provided more than £4.1bn in funding, through the Coronavirus Business Interruption Loan (CBIL) scheme, so far.
More than £1.33bn of loans have been approved in the week from April 21 to 28. The number of loans provided through the scheme increased by 8,638 during the same period to a total of 25,262, an increase of more than 50 per cent.
UK Finance said lenders are providing a range of support to SMEs, including capital repayment holidays, overdrafts, working capital extensions and asset-based finance.
Lenders have received 52,807 completed CBIL applications so far. Some 25,262 of these applications have been approved to date, while more applications are still being processed and are expected to be approved over the coming days.
The approval rate for the scheme now stands at 48 percent, however, this is only a two percent rise on the approval rate the week before, which was 46 percent.
Following CBIL reforms made this week by the Treasury and British Business Bank, supported by regulators, the largest lenders have announced they will not require forward-looking financial information and will only ask businesses for information and data they might reasonably be able to provide at speed. UK Finance said this should streamline the application process. Some businesses had been ask to supply financial forecasts and cashflow data for up until the end of 2022.
The British Business Bank approved four more lenders for accreditation under the CBIL scheme this week, bringing the total number of accredited lenders to 52.
Although business trade bodies have previously demanded a faster rise of approvals, and criticised the scheme’s structure, the Confederation of British Industry (CBI) this morning acknowledged that the government and banks have been “working around the clock" to provide funding faster.
CBI chief economist Rain Newton-Smith said: “This scheme has been a lifeline for many. The financial strain on businesses cannot be underestimated though and with more businesses applying for loans the banks must continue to be responsive to concerns, and work at full speed to deliver the scale of support needed.”
Suren Thiru, head of economics at the British Chamber of Commerce, said the number of firms accessing the CBILS is on an encouraging upward curve, but added: “A concerningly high number of firms continue to struggle to access this crucial lifeline.
“The Bounce Back loan scheme is a welcome step toward getting cash to the smallest firms more quickly. The UK government and financial institutions should simplify and standardise the CBILS application processes to unlock access for more businesses of all sizes.”
Thiru said serious consideration must also be given to the expansion of grant schemes for firms unwilling to take on more debt repayments.
Stephen Jones, chief executive of UK Finance, said: “The banking and finance sector recognises the role we must play in getting the country through these tough times, and staff are working incredibly hard to get money to those viable businesses that need it.”