Category: Coronavirus Funding updates

Just before Christmas The British Business Bank released statistics revealing the level of funding granted by way of the Coronavirus Business Interruption Loan Scheme, Bounce Back Loan scheme, Larger Business Interruption Scheme and the Future Fund

The totals are stunning; £68Billion provided across the 4 schemes to over 1.5Million businesses.

The Bounce Back scheme has provided £43.5Billion from 1.381Million loans, suggesting an average loan size of just over £30k.

CBILS totals are £19.6Billion across 82618 loans, giving an average of £237k, and the numbers for Larger Business Interruption Scheme are £4.97Billion lent across 675 loans (average, £7.3M)

At the moment the schemes are scheduled to end on 31/1/21.

As we approach the anniversary of the schemes beginning, repayments will start to fall due and, over time, delinquency rates will be interesting to monitor and I guess will be a long way away from historic delinquency rates that may be expected in non-pandemic times.

Anticipate a big year for the Insolvency Profession and HMRC’s attitude will be crucial.

Figures released on 22/10/20 from British Business Bank reveal the level of support given thus far to UK businesses, since the start of the pandemic.

Via the Bounce Back Loan Scheme £40.2Billion has been provided to over 1.3million businesses, suggesting an average loan size of £30k.

Via the CBILS some £17Billion has been lent to just over 73k businesses indicating an average loan size in the region of £230k.

Via the Large Business scheme £4.5Billion has been provided to 623 businesses with an average therefore around £7Million

Overall, including the Future Fund (£770Million) support totals £61.9Billion. A staggering figure. I have written previously about concerns https://factoringpartners.co.uk/2020/10/07/should-we-be-worried-about-the-cbils/ and these concerns and observation remain valid.

Today, 7th October 2020, the National Audit Office issued a report into the Bounce Back Loan Scheme, whereby Government guarantees of 100% of loan value were given to accredited lenders who provided loans from £2k to £50k to businesses.

Anecdotally there have been stories doing the rounds of businesses applying for loans either fraudulently or with such weak financials they would never normally pass any form of credit process; so it was always likely fraud and delinquency levels would be materially higher than those to be expected in a non-Covid environment.

The preliminary central estimate in the NAO’s report is that 35% to 60% of borrowers may default but does qualify this remark adding that the estimate is ‘highly uncertain’.

If the actual figure is anywhere close to this estimate then its deeply troubling for two reasons, firstly it will add to the overall economic impact of the virus and secondly, from a human behaviour perspective, it means that a lot of people have deliberately and maliciously set out to exploit this pandemic to satisfy their own avarice.

Incredibly there are now over 90 lenders accredited by The British Business Bank to offer loans under the CoronaVirus Business Interruption Loan Scheme (CBILS); a full list is accessible here.

There are far fewer accredited lenders offering support under the Bounce Back Loan Scheme, with only 27 listed today, 19th August 2020

Statistics are not published (or at least I cannot find them) that reveal how much each lender has lent under the various schemes but the aggregate now stands at over £52Billion, with over 1.23million businesses supported.

The schemes may close in the Autumn although there’s a certain amount of ambiguity in dates quoted; what’s for sure is that the schemes will have to end after which SME’s in need of finance will have to revert to conventional sources.

Its at this point that good, reputable lenders will have a crucial role to play, structuring appropriate facilities, suitably secured, enabling UK SME’s to survive and thrive a (hopefully) post Covid-19 environment.

If a post Covid-19 business environment is likened to a post recession then alternative financiers will be busy and experienced brokers have a profoundly important part to play.

New figures from the British Business Bank released on 4/8/20 reveal that the level of support given to British businesses is now over £50Billion

The largest element of funding has come via Bounce Back Loans (£2k to £50k), with the cumulative value of approved facilities totalling £34.34Billion and with over 1.1m businesses approved an average loan size of just over £30k is evident

£13Billion has been approved under CBILS (up to £5m) across just short of 59k businesses suggesting an average loan size of just over £220k.

With more lenders being added to the list it will be interesting to see where the numbers end and particularly interesting to see what level of delinquency becomes evident over time.

Why some lenders have bothered getting accreditation is a mystery as there are some who simply wont lend still.

Today, 14th July 2020, British Business Bank released updated statistics revealing that Government guaranteed loans (both partial and entire) now total £46.3 Billion, of which loans under the Bounce Back Loan scheme total £31.7 Billion

A stunning level of support, it will be fascinating to see, over time, delinquency rates along with fraud figures. Some of the stories doing the rounds on social media, some genuine some probably fabricated, suggest some amazing abuses of the various schemes.

Factoring Partners has assisted with a number of applications but will never charge a fee for so doing.

Figures today, 7th July 2020, from The British Business Bank reveal the extent of the support so far, provided to UK businesses.

Under the Bounce Back Loan scheme (up to £50k) there have been over 1 million facilities approved with £30.93 billion the cumulative value of approved facilities; suggesting an average loan size of just over £30k.

Under the CoronaVirus Business Interruption Loan Scheme (CBILS) 53,546 loan applications have been approved, their cumulative value being £11.49 Billion, indicating an average facility of £214k.

Under the Large Business Interruption Loan Scheme 394 facilities have been approved with a total of £2.58 Billion, an average loan size of just over £6.5m

Spectacular numbers in a bid to help and secure UK businesses.

The list of accredited lenders continues to grow, with over 80 now listed on The British Business Bank web site, as at 8th June 2020.

(The Bounce Back Loan Scheme (for loans from £2k to £50k, has far fewer accredited lenders, listed here, again, as at 8th June 2020)

One aspect that remains frustrating, certainly for their customers, is the absence of Handelsbanken from either list. A number of sources suggest appropriate applications have been made, but no approval has been given.

This gives a real problem to a number of their customers seeking support but having to go to other lenders, many of whom will only help, understandably, their own customers.

As of today, June 2nd 2020, figures from the British Business Bank reveal the popularity of the Bounce Back Loan scheme, with 699,354 cumulative approved facilities with a cumulative approved value of £21.29billion; to me that looks like an average loan size of just over £30k.

The cumulative value of approved loans under the CoronaVirus Business Interruption Loan Scheme (CBILS) is £8.92 billion representing 45,843 facilities, suggesting an average loan size of just short of £200k

Add the CoronaVirus Large Business Interruption Loan Scheme where £1.1billion is the cumulative approved amount, across 191 approvals and nearly three quarters of a million businesses have benefitted from over £31billion in loans.

The numbers are remarkable but there is worry in the banking community, specifically relating to the Bounce Back Scheme with some suggesting around half of them will never see any repayments at all.

The implications 12 months hence could be significant, for government in underwriting the loans, for banks, if government don’t honour guarantee and for borrowers if repayment falls back to them.

As at today, 20th May 2020 there are 76 accredited lenders offering CoronaVirus Business Interruption Loans, these can be found on the British Business Bank web site.

One curiosity is the absence of Handelsbanken, their catch line ‘A bank that puts customer satisfaction first’ appears a little thin as some of their customers struggle to obtain funds under the CBILS

Many of the accredited lenders will only deal with their own customers and others will only offer facilities if wrapped up in invoice or asset finance. Some have financial restrictions and/or geographical limitations.

Given Handelsbanken operate a branch network, and have a profile far larger than many of the accredited lenders this seems strange.

Hopefully they will be able to contribute soon.