British Business Bank reports 1.63 million loans provided £ 75.1 billion to businesses affected by COVID-19


Last week the British Investment Bank update on progress on loans to UK businesses affected by the current COVID-19 health crisis. Launched as part of several government programs designed to support businesses during a difficult time, the Bank said 1,630,155 government guaranteed loans worth £ 75.1 billion had been made to businesses in difficulty during the economic challenge.

The British Business Bank said the amount includes 1,531,095 Bounce back loans (BBLS) worth £ 46.5 billion, 98,344 loans worth £ 23.3 billion Coronavirus Business Interruption Loan Program (CBILS) and 716 loans worth £ 5.3 billion under the Large Business Coronavirus Interrupt Loan Programe (CLBILS). The rebound loan program top-ups issued 101,666 loans which were approved for a value of £ 900 million.

The UK government has determined that CBILS, CLBILS and BBLS will all close on March 31, 2021. The new Recovery loan program open for applications on April 6, 2021.

The program designed to support start-up businesses that may not be eligible for a loan, the Future Fund, has now issued £ 1.2 billion in convertible loans to 1,236 companies since the fund opened on May 20.

This was matched by at least the same amount from third party investors, including crowdfunding platforms like Seedrs and Crowdcube. The Future Fund closed on January 31, 2021. Regarding other lending programs, traditional financial firms and fintechs have participated in providing loans to affected businesses.

A brief description of the loan programs is presented below.

Bounce Loan Program (BBLS)

BBLS is a demand-driven loan program that targets small and micro businesses, providing loans ranging from £ 2,000 to 25% of business turnover with a maximum loan of £ 50,000. Providing lenders with 100% government guaranteed collateral and standardizing the application form has led to a faster process, with many loans becoming available within days. The Bounce Back Loan Scheme allows businesses to obtain a six-year term loan at a government-set interest rate of 2.5% per annum. The government will cover the interest payable in the first year. The program will be open until March 31, 2021.

Coronavirus Business Interruption Loan Program (CBILS)

CBILS is a demand-driven program providing loans to small businesses with turnover of up to £ 45million. Bill finance and asset finance facilities are available from £ 1,000 to £ 5 million, while term loans and revolving credit facilities are available from £ 50,000 to £ 5 million. The government makes a payment to cover interest and fees collected by lenders under CBILS for the first 12 months. The program will be open until March 31, 2021.

Large Business Coronavirus Disruption of Service Loan Program (CLBILS)

CLBILS is a demand-driven program for large companies with turnover over £ 45million. CLBILS can be used to support term loans, revolving credit facilities, bill finance facilities and asset finance facilities. The maximum amount available through CLBILS for a borrower and their group is £ 200 million. Term loans and revolving credit facilities in excess of £ 50 million are offered by CLBILS lenders who have obtained additional accreditation. The maximum size of the invoice finance facilities and asset finance facilities is £ 50 million. Companies borrowing more than £ 50million through CLBILS are subject to further restrictions on dividend payments, senior salaries and share buybacks during the life of the loan. The program will be open until March 31, 2021.

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