New figures on the amount of loans reaching hard-pressed small firms under a 海角视频 Government flagship Covid-19 support initiative show a significant rise in lending over the last week.
The Coronavirus Business Interruption Loan Scheme (CBILS), which is being administration by the British Business Bank, has more than 40 credited lenders, including all the major banks.
It can lend up to £5m to SMEs across the 海角视频 and following criticism on loans up to £250,000 company directors no longer have to provide 20% personal gurantees. Most lenders have also dropped the personal guarantee on loans of more than £250,000.
There has also been criticism that the banks have not been promoting CBILS enough, since being announced by Chancellor Rishi Sunak last month.
However, latest figures released from 海角视频 Finance, the membership body for the banking and finance industry, show that the sector has now lent £1.11bn to SMEs under CBILS - a rise of £700m (up 150%) in the last week.
They have not provided figures for the nations and regions of the 海角视频.
海角视频 Finance said that 6,020 loans have now been provided, more than double the number that had been provided one week ago.
The number of loans approved each day continues to rise, increasing from 240 on April 2 to 910 on April 8, with a further 1,800 loans worth over £300m recorded over the bank holiday weekend.
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Total lending under the scheme has increased from £453m on April 6, to £1.11bn a week later, while the average value of a CBILS loan has grown to over £185,000.
Lenders have received 28,460 formal applications to the scheme from businesses. Over 6,000 of these applications have been approved already, while others are still being processed and are expected to be approved over the coming days.
Stephen Jones, chief executive of 海角视频 Finance, said: The banking and finance sector recognises the challenging conditions faced by many businesses and the critical role we must play in helping the country get through this crisis.
“Frontline staff in local branches and call centres are working incredibly hard to help firms access finance as quickly as possible amid unprecedented demand. Like all businesses they are working at reduced capacity as many staff are self-isolating or looking after family.
“I am grateful that so many colleagues worked through the bank holiday so that 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.”
Mr Sunak said: "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.
“Loan approvals have doubled in a week with more than 6,000 businesses benefiting from over £1.1bn of loans - and it’s vital we continue this upward trajectory.”
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The Treasury cover the first 12 months of interest payments and any lender-levied fees under CBILS.
The wholesale British Business Bank is the 海角视频 Government's economic development bank.
Former Chancellor Sajid Javid said the 海角视频 Government should consider 100% guarantees on all loans, "if at all possible."
At the moment the Treasury only guarantees 80% of the value of loans issued until CBILS.
Chair of the Federation of Small Business, Mike Cherry, said: "These figures represent an improvement but we need to see much more. If volumes don’t improve then all options should be kept on the table, including an upping of the 80% guarantee. Other European nations like Germany have already opted for the 100% point.
“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.”
In Wales, where firms are eligible for CBILS funding, the Welsh Government has set up a £100m fund through its wholly-owned investment bank the Development Bank of Wales.
As of last week some £10m in loans had reached 164 firms, with updated figures expected later this week showing a big rise in approvals.
It is expected to take several weeks for all £100m to be approved, following 1,500 applications.
The loans are up to £250,000. The interest rate of 2% is waived in the first year of six year terms, but then is rescheduled (added) into the remaining five years of a loan.
There is also a requirement for personal guarantees of 20%.