The Coronavirus Business Interruption Loan Scheme (CBILS) has now raised over £1.1 billion for small and medium-sized enterprises (SMEs), official figures have revealed.
However, just over 6,000 of more than 28,000 applications for finance have been approved, suggesting more needs to be done to get cash into struggling businesses’ hands.
The figures, published by UK Finance, show that total lending under the Government-backed scheme increased by £700 million in the last week, up by around 150 per cent, with more than double the number of loans provided compared to one week ago.
Meanwhile, the average value of a CBILS loan has grown to over £185,000.
Under the CBILS, small and medium-sized enterprises (SMEs) who have been adversely affected by the coronavirus pandemic can apply for finance with a Government guarantee of 80 per cent on loans up to a maximum value of £5 million. The Government will also cover the first 12 months of interest and fees.
However, with just one in five applications approved, experts have warned that there is 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,” said Federation of Small Businesses (FSB) Chairman Mike Cherry.
“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? “
Mr Cherry added: “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.”
Commenting on the figures, Chief Executive of UK Finance Stephen Jones said staff are working incredibly hard to help firms access finance “as quickly as possible amid unprecedented demand”.
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