Tuesday 23 June 2020 10:24 am

Coronavirus business loans hit £41bn, as approval rates stagnate

British businesses have now borrowed £41bn in loans backed by guarantees from the government to cope with the impact of coronavirus, but approval rates are failing to improve.

Approval rates for the coronavirus business interruption loan scheme (CBILS) remain stuck at 51 per cent, hitting a total of £10.53bn lent so far. As of 21 June just 50,482 businesses have received this type of loan, which carries an 80 per cent guarantee by the government, up from 49,247 by 14 June.

The bounce back loan scheme (BBLS), which supports businesses with 100 per cent state-backed loans, continues to be the most popular choice with £28.09bn lent at an approval rate of 82 per cent.

More than 921,000 loans have been approved out of 1.12m applications as of 21 June, up from 863,584 a week earlier.

Applications for the coronavirus large business interruption loan scheme (CLBILS) continued to have the lowest approval rate of any of the government-backed loans at 44 per cent. However this is a minor improvement on the rate of approvals a fortnight ago, which was 40 per cent.

Out of 709 applications banks have approved 315 loans, taking the total amount lent to £2.10bn.

Meanwhile the government’s Future Fund scheme has now approved £236.2m of convertible loans, after receiving applications worth £515m on the first day of launching.

The approval rate for the scheme, which supports startups subject to funding matched from investors, sits at 40 per cent.

Data from the British Business Bank today showed almost half (45 per cent) of funding approved to companies for convertible loan agreements —worth £106m of the Future Fund’s total amount lent — have their headquarters located outside of London.

London businesses have so far received £130.2m of the Fund’s £236.2m, making up 55 per cent of all approved applications.