Coronavirus: Fewer loans approved by banks

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Banks approved fewer Covid-19 loans in the week to Tuesday, leaving half of firms still awaiting emergency help.

The number of Coronavirus Business Interruption Loans (CBILs) agreed was 8,638, down from more than 9,000 the previous week.

Of 52,807 loans applied for, almost 28,000 have still to be approved.

“Staff are working incredibly hard to get money to those viable businesses that need it,” said UK Finance chief executive Stephen Jones.

• ‘If we cannot get a loan we will go under’
• ‘My firm is viable – but I can’t get a loan’

More than £1.33bn of loans was approved in the week from 21 April to 28 April, down from £1.45bn in the previous seven days.

“A concerningly high number of firms continue to struggle to access this crucial lifeline,” said Suren Thiru, head of economics at the British Chambers of Commerce.

“More than £4bn has been delivered to over 25,000 businesses so far through the CBIL scheme,” Mr Jones said.

Scheme ‘should be simpler’

Banks have come under heavy criticism for delays in handing out loans, but have blamed the heavy workload, the need to complete the necessary credit checks and a shortage of staff.

Trade body UK Finance said changes to the scheme announced by the chancellor this week would allow lenders to streamline their application processes and help more businesses to access the support they need.

Small firms will be able to access 100% taxpayer-backed loans of up to £50,000 within days of applying from next week.

“The Bounce Back loan scheme is a welcome step toward getting cash to the smallest firms more quickly,” said the BCC’s Suren Thiru.

“The UK government and financial institutions should simplify and standardise the CBILs application processes to unlock access for more businesses of all sizes.”

Virus hits Lloyds

Meanwhile, Lloyds Bank has revealed the coronavirus crisis has led to a massive 95% drop in profit.

Pre-tax profit for the first three months of the year were £74m, down from more than £1.6bn in the same three months of 2019.

“The coronavirus pandemic presents an unprecedented social and economic challenge, which is having a significant impact on people and businesses in the UK and around the world,” said boss Antonio Horta-Osorio.

The bank said it had lent about £410m to 3,752 small businesses as part of the CBIL scheme.

Lloyds is behind many of its rivals – HSBC has lent £765.2m, Barclays £738m and RBS £1.4bn.