Banks funnelled more than £79 billion in Government-backed loans to companies trying to stay afloat during the pandemic, new data shows.
The Chancellor said the Government has “delivered” on the support it promised to businesses.
Final data released on Tuesday shows that businesses borrowed another £4.2 billion in the final days of three loan schemes.
It means that in total, the Bounce Back Loan Scheme provided £47.36 billion to 1.56 million firms; the Coronavirus Business Interruption Loan Scheme (CBILS) provided loans worth £26.39 to 110,000 companies, while a scheme for larger businesses, CLBILS, provided £5.56 billion to 753 companies.
“We promised to stand by businesses at every stage of the pandemic and we have delivered on that promise,” said Chancellor Rishi Sunak.
“I am proud of the extraordinary extent of support we’ve offered since March last year – we will continue to back businesses and protect people’s jobs as we recover from coronavirus.”
The Treasury delayed publishing the final data for the three loan schemes for months, because banks had until the end of May to process applications that had come in before the deadline at the end of March.
It had previously released monthly updates, with the last one in the middle of March just days before the schemes ended. It turned down a Freedom of Information request for the data.
A new Recovery Loan Scheme was launched after the three pandemic programmes finished.
Data from the British Business Bank, which administers the schemes, shows that 21% of Bounce Back Loans went to businesses in London. Another 14% went to those in the South East and 11% to companies in the North West.
Construction companies took out 17% of the loans, while a category labelled “wholesale and retail trade; repair of motor vehicles and motorcycles” took 15% of the loans provided.
The bank’s chief executive, Catherine Lewis La Torre, said: “The Covid-19 loan schemes have been an important part of the Government’s response to the pandemic, providing businesses with much-needed breathing space and reducing cash-flow concerns for many.
“We’re pleased to see evidence that they have helped smaller businesses right across the UK and look forward to helping more businesses to prosper and grow as we look towards economic recovery.”
But the speed at which the loans were rolled out – with billions flying out of banks in the first few days after Bounce Back Loans were launched – has sparked concerns that the Government might be on the hook for billions.
Banks lent the money, so will have to try to get it back.
But if they cannot, then the Government will refund them for 100% of the bounce back, and 80% of the CBILS and CLBILS loans.
According to one official estimate as much as 60% of the Bounce Back Loans might be the victims of fraud and error.