Hopes that smaller companies might benefit from government coronavirus cash have been dashed with the news that only a small percentage are getting cash.
Just one percent of inquiries from SMBs into the government’s coronavirus business interruption loan scheme (CBILS) has resulted in approved loans, according to data compiled by UK Finance and obtained by City AM.
Just over 2,000 loans have been dished out to UK SMBs, indicating that 0.65 per cent of enquiries to the scheme has resulted in loans so far, with 52,710 phone enquires and 256,483 online enquiries made as of Monday 6 April, according to the financial services body, which compiles information from banks every day about their lending through the scheme.
So far £291.9 million has been handed out, City AM reported.
CBILS was launched on 23 March and offers loans to SMBs with a turnover of up to £45 million, with businesses able to access the money through over 40 approved lenders and the government guaranteeing 80 per cent of the loans.
Chancellor of the Exchequer Rishi Sunak had to scrap some of the more stringent measures associated with the scheme on Thursday due to criticism from business owners that such measures were slowing down lending.
The most recent figure shows that the number of loans has doubled since the chancellor ditched the most of the requirements put on business owners, with only 983 loans having been approved and £90.5 million lent out up to 1 April.
Despite the overhaul, the number of loans made through CBILS as a percentage of the number of enquiries has fallen in recent days with the rate on 1 April at 0.74 percent, but falling to 0.65 percent five days later, City AM reported, adding that this figure is likely to rise as applications are processed.
Edwin Morgan, director of policy at the Institute of Directors (IoD) business group, said that it was “encouraging” to see that more loans had been given out since Wednesday, adding that there are “clearly still significant bottlenecks. If businesses have to go much longer without funds they could fall by the way-side”. h
