Banks have approved less than half of applications for coronavirus loans, as industry figures warn firms risk missing out.
Loans for businesses increased £1.45bn in the week from 14 April to 21 April. It brings total lending under the Coronavirus Business Interruption Loan Scheme (CBILS) to £2.8bn, according to UK Finance data.
Over 9,000 loans have been provided in the past week bringing the total number to over 16,600. However, the loan scheme has come under fire from firms who say it is too slow to respond to the coronavirus threat.
Banks are working through a large backdrop, with just 16,624 applications approved out of 36,000.
While the scheme is picking up, the figures pale in comparison to other countries’ programmes. Sunak has faced calls to increase the government guarantee to 100 per cent.
The chancellor is not convinced by the idea. Earlier this week he said: “When you look at the totality of what we’re doing, it’s more significant in scope and in scale of most of those other countries [offering 100 per cent loan guarantees].”
Industry calls for quicker approvals
Industry figures have welcomed the new figures which show the coronavirus loans are reaching more and more businesses. The British Chamber of Commerce’s (BCC) head of economics, Suren Thiru, said the figures were “encouraging”.
However, Rain Newton-Smith, chief economist at the CBI, said that while the pace is picking up “many firms are still missing out.”
“More loans must get out the door faster for the businesses facing distress, especially smaller businesses,” she added.
Melissa Davies, economist at Redburn, said government support is “slow to get into the lifeblood of the UK economy”.
Thiru said the number of applications processed and approved needs to increase. It is a “crunch week for firms urgently trying to access financial support”. He called on the government and financial institutions to work together “to ensure that cash gets to the frontline as quickly as possible.”
Davies echoed this sentiment, calling on the government and BoE to “throw the kitchen sink at this to prevent a downward spiral in employment and demand”.
By 21 April, HSBC had lent £480.5m to 3,539 firms through CBILS. Barclays had approved 2,971 CBILS loans worth £586m.