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Law360, London (April 15, 2020, 3:37 PM BST ) British lenders have provided over £1.1 billion ($1.4 billion) to smaller companies since March under an emergency lending program established by the government to keep businesses viable during the COVID-19 pandemic, a financial industry group said Wednesday.
UK Finance said banks have provided 6,020 loans to small and mid-sized enterprises so far under the government-backed coronavirus business interruption scheme. The total lending under the scheme grew by £700 million since last week, the trade group said, an increase of 150% on the £453 million lent by April 6.
The average loan granted by banks is £185,000, UK Finance said. And over the bank holiday weekend, lenders approved 1,800 loans worth over £300 million in total.
"The banking and finance sector recognizes the challenging conditions faced by many businesses and the critical role we must play in helping the country get through this crisis," Stephen Jones, chief executive of UK Finance, said. "Over one billion pounds of support has now been delivered to businesses. We expect this figure to continue to grow rapidly as lenders work hard to help get Britain through the current crisis."
But there are signs that lenders are struggling to get through the 28,460 applications for the scheme, with only around 6,000 being approved already. UK Finance said that staffing levels at banks are lower than usual as employees self-isolate at home.
Chancellor Rishi Sunak announced the program on March 17 to allow the government to underwrite loans of up to £5 million to companies that are struggling during the shutdown.
Sunak expanded the scheme this month to all viable small and midsized businesses that have faced financial difficulty during the COVID-19 pandemic, rather than just those that have been turned down for commercial lending.
"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," Sunak said in a statement Wednesday. "It's vital we continue this upward trajectory."
The British Chambers of Commerce, which represents businesses across the country, said earlier in April that just one in 100 companies had successfully applied for the scheme, while 8% have been rejected.
The body said last week that 16% of the 1,000 British businesses it quizzed held less than a month's worth of cash in reserve, while 6% reported having no money in reserve.
--Editing by Alyssa Miller.
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