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Home Business News UK businesses borrow £52.6bn to survive the pandemic

UK businesses borrow £52.6bn to survive the pandemic

by Mark Fitt Political Journalist
9th Sep 20 1:19 pm

The coronavirus pandemic caused a massive financial hit to businesses in the UK, confronting them with substantial revenue and cash flow losses. Many businesses were forced to ask for support through the government-backed loan schemes to survive in the times of unprecedented economic disruption.

According to data presented by Buy Shares, the cumulative value of loans that have been approved through the Coronavirus Businesses Interruption Loans Scheme (CBILS), Bounce Back Loan Scheme (BBLS), and Coronavirus Large Business Interruption Loan Scheme (CLBILs) in the United Kingdom hit £52.6bn in August.

More than 1.2m loans approved in four months

The government created a range of measures to help support businesses of all sizes throughout the coronavirus crisis. The smaller companies can apply for the CBIL Scheme, which operates through the British Business Bank via more than 40 accredited lenders. These lenders can provide up to £5m worth financial help in the form of term loans, overdrafts, and asset finance.

The CLBILs facilitates access to finance for medium-sized and larger businesses with a group turnover of more than £45m. This scheme can provide up to £200m worth financial help for the companies affected by the coronavirus outbreak.

The BBLS allows lenders to provide a six-year term loan from £2,000 to 25% of a business’ turnover.

In the second week of May, the combined value of facilities approved through these three schemes amounted to £14.8bn, revealed the HM Treasury data. By the middle of June, this figure surged by 157% to £38.2bn worth of loans.

Statistics indicate the total value of facilities approved through the government-backed loan schemes hit £46.2bn by the end of the second week of July. By 16 August, this figure jumped by 14%, reaching a total of $52.6bn.

Statistics indicate the banking and finance industry has supported more than 1.2m UK businesses with lending schemes to help them through the pandemic.

£35.5bn worth of loans approved through the Bounce Back Loan Scheme

The Bounce Back Loan Scheme represents the most significant part of the government-backed aid package in the United Kingdom, with £35.5bn worth of loans approved by August. This scheme has been a success in providing more than 1.1m firms with vital government-backed loans at an affordable rate with no interest or repayments due in the first year.

The HM Treasury data revealed the cumulative value of lending through the CBIL Scheme reached almost £13.7bn in August or 25% of all approved loans.

Statistics indicate that between 10 May and 16 August, 516 medium-sized and larger businesses in the UK received £3.5bn worth financial help thought the CBIL Scheme.

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