According to figures, more than £1.1bn has been given to over 6,000 business under the Coronavirus Business Interruption Loan Scheme (CBILS).
Less than a quarter of companies have formally applied for the loans have received any cash support.
UK Finance said the lending scheme has grown by £700m this last week with an increase of 150%, and a total of 6,020 loans have been approved.
Loans have risen from 240 on 2 April to 910 on 8 April, and a further 1,800 loans valued at more than £300m were recorded over the Easter bank holiday weekend.
Fewer than one in four loans have been approved as lenders have received a total of 28,460 applications.
However, UK Finance stressed that other applications are being processed and are “expected to be approved over the coming days.”
Stephen Jones, chief executive of UK Finance said, “Frontline staff in local branches and call centres are working incredibly hard to help firms access finance as quickly as possible amid unprecedented demand.
“Like all businesses they are working at reduced capacity as many staff are self-isolating or looking after family.”
Chancellor of the Exchequer Rishi Sunak said, “Getting finance to businesses is a key part of our plan to support jobs and the economy during this crisis, and we’re working with lenders to ensure support reaches those in need as soon as physically possible.
“Loan approvals have doubled in a week with more than 6,000 businesses benefiting from over £1.1bn of loans, and it’s vital we continue this upward trajectory.”
Federation of Small Businesses (FSB) National Chairman Mike Cherry said, “This improvement marks a starting point, but while one in five formal CBILS applications are approved, the major banks claim their approval rates for standard commercial loans are many times higher than that. These loans are state-backed, so approvals should be higher still. There’s still a lot of work to do.
“Many members tell us it’s difficult to get to the formal application stage – banks are still slow to respond to CBILS enquiries. Even if you do get your forms through, the process is very demanding for the uninitiated. We need simplification: banks should look at pre-filling forms based on data they already have on customers, and we shouldn’t have behind the scenes reporting requirements holding up approvals.
“These weekly updates are welcome. However we’re lacking detail about the customer journey from start to finish: how many have enquired? How many have dropped out at the application stage? What happens to those who are rejected? Are banks receptive to those who are not existing customers?
“And we need to see this data bank by bank so small businesses know which providers are embracing the scheme and which are not. The British Business Bank publishes bank by bank data on its Enterprise Finance Guarantee initiative so we know it can be done.
“At more than £185,000, the average value of a CBILS loan is high. We need reassurances that the fast-track process we’ve been promised for certain loans worth under £30,000 is working. This will require system changes at certain institutions, those changes must happen quickly so all accredited lenders are supporting the full spectrum of small firms. More detailed data on micro business applications would be helpful.
“These figures represent an improvement, but we need to see much more. If volumes don’t improve then all options should be kept on the table, including an upping of the 80% guarantee. Other European nations like Germany have already opted for the 100% point.
“And the question of support for early stage, loss making start-ups remains a pressing one. The list of businesses that spent their early years in the red only to go on and be great successes is as long as your arm. They must not be abandoned.”