The British banking and finance sector has so far provided in excess of £2.8 billion of lending to UK SMEs through the Coronavirus Business Interruption Loan Scheme (CBILS). In the week between April 14th and 21st, a further 9,000 loan applications were approved, almost a 120 per cent increase.
However, despite Jones’ assurances that frontline staff are working “tirelessly” to process the remaining applications and get money to businesses as quickly as possible, the rate at which applications are being dealt with has come in for criticism.
This period saw the total amount lent increase by £1.45 billion, with over 16,000 loans now approved from more than 36,000 completed applications. UK Finance Chief Executive Stephen Jones said: “We stand ready to support many more businesses in the weeks ahead and will continue to work closely with the government to ensure businesses can access the support they need.”
Suren Thiru, Head of Economics at the British Chambers of Commerce, has said: “The number of applications processed and approved will need to be increased significantly in what is a crunch week for firms urgently trying to access financial support.”
“Our Coronavirus Business Impact Tracker tells us that a concerningly high number of businesses are still finding accessing the scheme too complex and too lengthy. The government and financial institutions must continue to work together to identify practical steps to improve the workings of the CBILS scheme to ensure that cash gets to the frontline as quickly as possible.”
Further criticism of CBILS has focused on concerns that the slow lending rate and strict eligibility criteria could lead to a significant number of small businesses collapsing as their cash reserves dry up. Several prominent political figures, including former Conservative chancellors George Osborne and Sajid Javid, have suggested that providing loans backed 100 per cent by the government would be a good idea.
Amid the criticism, there has been growing pressure for the government to approve some of the UK’s fintech firms to provide business loans, with some alternative lenders arguing that they can provide funding support quicker than their larger counterparts.
Industry body Innovate Finance says that it is working with 38 “alternative lenders” to ask the government to provide support for the fintech sector and allow them to do more to take part in business relief programmes.
If you need help preparing your CBILS application and selecting the right approved provider, please complete the short form below and one of our senior advisers will be in touch.
London167 Oakhill RoadPutney London, SW15 2QS
Join our weekly newsletter. We promise we won’t spam.
© 2020 Business turnarounds. A division of Business Sale Report Ltd