The devastating Covid-19 crisis has caused a massive financial hit to businesses in the United Kingdom, confronting them with substantial revenue and cash flow losses. Many of them have been forced to request for support through the government-backed loan schemes to survive in the times of unprecedented economic disruption.
According to data presented by BuyShares.co.uk, the cumulative value of loans that have been approved through the Coronavirus Businesses Interruption Loans Scheme (CBILS), Bounce Back Loan Scheme (BBLS) and Coronavirus Large Business Interruption Loan Scheme (CLBILs) in the United Kingdom hit £52.6bn in August.
1.2 million loans approved
The United Kingdom’s government has put in place a range of measures to help support businesses of all sizes throughout the coronavirus crisis. The smaller companies can apply for the Coronavirus Business Interruption Loan Scheme (CBILS), which operates through the British Business Bank via more than forty accredited lenders. These lenders can provide up to £5 million worth financial help in the form of term loans, overdrafts and asset finance.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) facilitates access to finance for medium-sized and large businesses with a group turnover of more than £45 million. This scheme can provide up to £200 million worth financial help for the companies affected by the coronavirus outbreak. The Bounce Back Loan Scheme (BBLS) allows lenders to provide a six-year term loan from £2,000 to twenty five per cent of a business’ turnover.
In the second week of May, the combined value of facilities approved through these three schemes amounted to £14.8 billion, revealed the HM Treasury data. By the middle of June, this figure surged by 157% to £38.2bn worth of loans.
Statistics indicate that the total value of facilities approved through the government-backed loan schemes hit £46.2 billion by the end of the second week of July. By mid August, this figure jumped by fourteen per cent, reaching a total of $52.6 billion.
Statistics indicate that the banking and finance industry has supported more than 1.2 million UK businesses with lending schemes to help them navigate the Covid-19 crisis.
Bounce Back Loan Scheme
The Bounce Back Loan Scheme represents the most significant part of the government-backed aid package in the United Kingdom, with £35.5 billion worth of loans approved by August. This scheme has been a success in providing more than 1.1 million firms with vital government-backed loans at an affordable rate with no interest or repayments due in the first year.
The HM Treasury data revealed the cumulative value of lending through the Coronavirus Business Interruption Loan Scheme reached almost £13.7 billion in August or twenty five per cent of all approved loans. Statistics indicate that between May 10th and August 16th, five hundred and sixteen medium-sized and large businesses in the United Kingdom received £3.5 billion worth financial help through the Coronavirus Large Business Interruption Loan Scheme.