UK lenders have dished out over £22bn in government-backed loans

By Aisling Finn on Tuesday 19 May 2020

Alternative LendingDigital Banking

Almost double the amount has been lent out via the Bounce Back Loan scheme than CBILS.

UK lenders have dished out over £22bn in government-backed loans
Image source: Chancellor Rishi Sunak/HM Treasury

The amount lent out to UK businesses by both banks and non-bank lenders has now surpassed £22bn, an increase of nearly £7.2bn from the week previous.

Banks and non-bank lenders have dished out nearly double the amount in Bounce Back Loans (BBL) than with the Coronavirus Business Interruption Loan Scheme (CBILS).

UK lenders have now given out £14.18bn in Bounce Back loans, compared to just £7.25bn in CBILS-backed loans, with loans from the Coronavirus Large Business Interruption Scheme (CLBILS) trailing behind on £0.59bn.

Similarly, the Bounce Back loan scheme has a much higher approval rate than its counterparts.

BBL approvals currently sit at about 80 per cent, while CBILS approvals are much lower with only a 50 per cent acceptance rate. CLBILS sits even further behind with a dismal 17 per cent acceptance rate.

The Bounce Back loan scheme has by far been the most popular government-backed initiative, possibly because of the 100 per cent guarantee it carries. 

To date, there have been over 581,000 applications to the BBL scheme and just over 81,000 to CBILS.

In the past week alone, there was a jump of over 217,000 applications to the BBL scheme, compared with over 16,500 under the CBILS.

Under the BBL scheme, SMEs can apply for a loan from £2,000 up to £50,000 whereas CBILS caters to larger SMEs who can receive loans from £50,001 up to £5m.

Fintechs continue to become accredited lenders under the BBL and CBILS programmes.

Late last week, Starling and Funding Circle announced a partnership to provide a £300m facility for SME lending under CBILS.

Despite being one of the most active fintechs offering the government-backed loans, Starling Bank has faced some backlash this week, even though it had lent out over £260m so far, after it stopped accepting sole trader business accounts because of  “record demand” on 14 May 2020.

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