Just 10% of emergency coronavirus loans for businesses have reached the frontlines in the two months since the government announced them, new figures show.
Numbers from the banking industry group UK Finance show £15bn ($18.5bn) has now been lent to businesses of all sizes across the government’s three major loan programmes.
A separate corporate finance scheme run by the Bank of England has arranged borrowing facilities worth £17.7bn, a spokesperson told Yahoo Finance UK.
It means just £32.7bn of the promised £330bn in state-backed loans to businesses has been delivered in the eight weeks since chancellor Rishi Sunak first announced state aid.
Sunak announced an “unprecedented” package of support for businesses on March 17, including £330bn of state-backed loans.
Business groups welcomed the support but have increasingly criticised the slow speed at which loans were reaching businesses. In the US, by contrast, a similar state-backed loan programme lent $350bn to businesses in just 13 days.
Part of the delay in the UK was down to the amount of paperwork associated with the flagship support scheme, coronavirus business interruption loans (CBILs). The government only guaranteed 80% of these loans, meaning full credit checks were still required.
Sunak launched Bounce Back loans in response. Banks can lend up to £50,000 to businesses under the Bounce Back scheme, with the government guaranteeing 100% of the loans.
Tuesday’s figures showed the Bounce Back scheme has already overtaken CBIL after only a week of operation: £8.3bn-worth of “Bounce Back” loans have been extended to almost 270,000 small businesses.
So far, £6bn-worth of coronavirus business interruption loans (CBILs) have been made to over 35,000 businesses.
Meanwhile, £359m has been lent to 59 mid-sized and larger UK businesses under the coronavirus larger business interruption loan scheme (CLBIL), which launched in late April.
“Bank staff are working tirelessly to get financing quickly to those firms who need it, with almost £15bn of lending provided to over 304,000 businesses through government-backed schemes so far,” UK Finance chief executive Stephen Jones said in an statement.
“This forms part of the industry’s broad package of support for businesses including commercial lending, capital repayment holidays, extended overdrafts and asset-based finance.”