Lloyds Bank has delivered over £1bn in “bounce back loans” to 32,000 small businesses on the first day of the scheme.
The bounce back loan scheme is the newest government support package for UK firms hit by the financial impact of the coronavirus.
Banks have reported a huge demand for the loans, and since its launch yesterday, 100,000 of the UK’s smallest firms have applied for support.
Lloyds said more than 32,000 of its smallest business customers applied for a bounce back loan on Monday, with an average loan amount of over £30,000.
The new loan scheme offers the UK’s smallest firms loans worth 25 per cent of turnover, up to £50,000. The loans are 100 per cent guranteed by the government.
It followed criticism of the flagship coronavirus business interruption loan scheme (CBILS). Companies reported that banks had been reluctant to lend through the scheme without a full state guarantee.
Money has already been released by the bank in part because the state guarantee on the bounce back loans eases the burden.
HSBC said it had received 34,5000 applications by 4pm yesterday and had agreed to lend out £650m. Barclays said it had approved 6,000 bounce back loans worth £200m by 2pm yesterday. Lloyds said it anticipates it will lend out more in the coming days.
Gareth Oakley, managing director of business banking, said: “Lending through the BBL scheme is just one way we’re supporting our business customers impacted by Covid-19. Over 14,000 businesses have had their overdrafts extended and we’ve granted over 25,000 capital repayment holidays since the pandemic began.”