Coronavirus business loans double, but only half approved
Banks have agreed less than half of applications made under the government’s Coronavirus Business Interruption Loan Scheme (CBILS).
While £2.8bn of loans have been agreed compared with the £1.1bn approved up to last week, banks are wading through a large backlog.
Only 16,624 applications have been approved out of 36,000.
Many small firms have told the BBC they require quick access to cash in order to survive.
“Bank staff are working hard to help viable businesses access the support they need to get them through these challenging times,” according to UK Finance the lobby group which collates the figures.
“Over half the total number of loans provided through CBILS have been approved in the past eight days alone.”
Lenders were criticised early in the programme for requesting personal guarantees from small business owners, in spite of the fact that the loans are backed by the state.
More reforms are needed, said Tej Parikh, chief economist at the Institute of Directors, Britain’s oldest business lobby group.
“The Government must consider reforms to improve the scheme, from raising its backing of small loans to helping more non-bank lenders play their part,” he said.
“To help those unable to access the scheme, we need to explore how to make the affordability criteria clearer, more consistent and less stringent, while looking at other routes such as overdraft facilities.”
Separately, the Office for National Statistics said that 80% of businesses are interested in the government’s Coronavirus Job Retention Scheme, which offers to pay four fifths of the wages of staff who have been furloughed because of the lockdown.