UK Finance: £38 billion provided to 910,000 businesses by lenders through Covid-19 loan scheme

More than 910,000 businesses have now been helped by the banking and finance industry through the government’s coronavirus loan schemes.

Figures published by HM Treasury today1 reveal that lenders have provided £38.2 billion through the three major government-backed lending programmes. £3.3 billion has been approved to 83,000 businesses in the past week, with more applications expected to be approved in the coming days as the industry continues to help the UK get through these tough times.

These figures come as recent research for UK Finance by BVA BDRC revealed that almost 90 per cent of SMEs have had their applications for a Bounce Bank Loan (BBL) or Coronavirus Business Interruption Loan (CBILS) facility approved where a final decision has been made.2

The industry has provided loans to over 860,000 businesses through the BBL scheme since the support was launched six weeks ago – an average of more than 140,000 approvals each week. These businesses have been approved for over £26.3 billion in total, including £2.6 billion in the last week.

Lenders have approved an additional £550 million through CBILS in the week since data was last published, reaching 1,600 businesses. In total, £10.1 billion has been lent through the scheme to 49,000 firms across the UK.

For larger businesses, £1.8 billion has been approved via the Coronavirus Large Business Interruption Loan Scheme (CLBILS) to 279 firms, including 35 new approvals in the past seven days.

These government-backed schemes are part of the banking and finance sector’s plan to help businesses in the UK through the coronavirus crisis. The research by BVA BDRC found that finance delivered through CBILS and BBLS is reaching those businesses who need it most, with 58 per cent of businesses who have secured funding from the two schemes saying they have less than three months in cash reserves, compared to an average of 39 per cent across all businesses. Over three quarters (78 per cent) of business owners who have received a government-backed loan have done or are planning to put some of their personal finances into their business, whilst across all businesses 39 per cent of owners have already done so or are planning to use their own funds.

In addition to the government lending schemes, the industry is providing extensive support to businesses including working capital extensions, overdraft extensions, capital repayment deferrals and asset-based finance, allowing them to access the support that is most appropriate to their needs.

Stephen Jones, CEO of UK Finance, said:

“Businesses of all sizes are facing unprecedented challenges in the face of the pandemic, but the banking and finance industry has a clear plan to get them through.

“Lenders have provided over 910,000 businesses with £38 billion through the government-backed lending schemes to date, with tens of thousands of approvals every day, ensuring financial support reaches those firms who need it most.

“It’s important to remember that any lending provided under government-backed schemes is a debt not a grant, and so firms should carefully consider their ability to repay before applying.”

Case studies

Coronavirus Business Interruption Loan

Lenstec Optical Group – spectacle lens manufacturer headquartered in Caerphilly 

Lenstec Optical Group, which is headquartered in Caerphilly and has facilities in Leeds and Hertfordshire, manufactures more than 4,500 pairs of glasses every day. A £1m loan from NatWest through CBILS has ensured that one of the UK’s biggest spectacle lens manufacturers is able to continue supporting NHS opticians during lockdown. The company supports about 2,000 opticians throughout the UK, from major retailers through to independent high street stores.

The Delga Group – print and packaging material supplier in Kent

The Delga Group, a leading supplier of print and packaging material based in Kent, received a seven-figure CBIL facility from HSBC UK. The loan will help provide vital stability to the business over the coming months, safeguarding the jobs of 140 employees and allowing it to focus on its customers and future growth plans.

Kitlocker.com Ltd - sportswear supplier in Sheffield

Sheffield based sportswear supplier Kitlocker.com Ltd received a six figure CBIL facility from Barclays, which will cover essential operating costs whilst allowing for loss of revenue due to a reduction in trade. 

The Cocktail Service Ltd – events supplier in Oxford

The Cocktail Service Ltd, a provider of premium mobile bars for events and festivals based in Oxford, secured a £100k CBIL facility from Santander. The funding will enable The Cocktail Service to retain its bartenders and mixologists as well as ensure it is able to meet short term running costs.

Giggling Squid - leisure and hospitality firm in Midlands and Southern England

Giggling Squid secured a loan through the CBIL scheme from Barclays, which will ensure the ongoing viability of the business through the pandemic and enable them to kickstart operations as the UK transitions out of lockdown.

 Bounce Back Loan

Jinnah Group – restaurant group in Yorkshire

Jinnah Group, a restaurant group based in Yorkshire, secured a Bounce Back Loan from HSBC UK. The funding is enabling the business to meet fixed payments and safeguard jobs for future.

Papadeli - caterer and cookery school in Bristol

Papadeli is a Bristol based caterer, delicatessen and cookery school. It secured a Bounce Back Loan through Barclays which will help the business to support its staff, as well as cover day to day costs and invest in stock.

Coronavirus Large Business Interruption Loan

Mitchells & Butlers – a UK-wide restaurant, pub and bar operator

Mitchells & Butlers is one of the UK's largest operators of UK restaurants, pubs and bars. Established in 1898, the Group operates 1,700 sites across the UK, including Harvester, Toby Carvery and All Bar One. The company received a £100m CLBILS loan, with the funding split equally between HSBC UK and Santander UK. It is one of the first CLBILS deals to be completed since the Government updated the scheme last month. This vital funding package ensures the business can continue operating as it prepares to reopen its sites in line with Government recommendations. The funding will support Mitchells & Butlers through the continued disruption of Covid-19 and help to secure the jobs of over 45,000 employees.

Other lending and support

Prolog Fulfilment – outsourcing specialist in Nottingham

Prolog Fulfilment, outsourcing specialist based in Nottingham, secured a six-figure funding package from HSBC UK. Throughout the Covid-19 outbreak the company has seen an increase in volumes, however the funding provided additional comfort during the initial uncertainty at the start of the crisis. 

Ends

Notes to Editor

For more information please call the UK Finance press office on 020 7416 6750 or email press@ukfinance.org.uk

UK Finance is the collective voice for the banking and finance industry. Representing more than 250 firms across the industry, we act to enhance competitiveness, support customers and facilitate innovation.

1.    HM Treasury data on lending under the CBIL, BBL and CLBIL schemes is available here. Figures show cumulative applications and approvals up to close of business on 14 June 2020 by accredited lenders, as reported to HM Treasury by close of business 15 June. Previous UK Finance data publications on lending under the CBIL scheme were based on data submitted by UK Finance members only. The Government intends to publish data on lending under the CBIL, BBL and CLBIL schemes going forwards. For further details please contact the HMT press office on pressoffice@hmtreasury.gov.uk

2. Full details of the survey by BVA BDRC of 1,200 UK businesses can be found here

3.    The banking and finance industry has put in place a clear plan to help Britain through:

○     1.8 million mortgage payment holidays

○     27 million interest-free overdrafts offered and 877,800 credit card payment holidays

○     £38 billion of lending to nearly 910,000 businesses through government Covid-19 lending schemes

○     Protecting customers from scams and fraud

○     Higher limit for contactless payments

4.    The Bank of England has announced that the Covid Corporate Financing Facility (CCFF) has so far supported £16 billion of lending.

5.    UK Finance issued a joint statement on behalf of the seven largest SME lenders in response to the Chancellor’s announcement of changes to the Coronavirus Business Interruption Loans Scheme (CBILS) on 27 April 2020.

6.    The British Business Bank (BBB) approved five more lenders for accreditation under the CBIL scheme last week, bringing the total number of accredited lenders to over 80. The total number of accredited lenders under the Bounce Back Loan Scheme is now 20, with the British Business Bank approving one new lender last week. All lenders accredited under the CBIL scheme have been invited to join the BBL Scheme.

7.    More information on the CBIL scheme is available here. More information on the BBL scheme is available here. More information on the CLBILS scheme is available here.

8.    The government’s 'support finder’ tool can help businesses and self-employed people across the UK to quickly and easily determine what financial support is available to them during the coronavirus pandemic.