• Ricky Shafier

CBILS approved applications rise again but does it tell the whole story?

UK Finance released figures today announcing the scheme has seen approvals increase 8,638 over the last week to a total of 25,262. But this comes amid claims that banks pre screen businesses before they apply

Under the Coronavirus Business Loan Interruption Scheme the banks have lent £4.1b to UK SMEs. This seems a far way short of the £330b the Chancellor made available when the scheme was announced. Currently just over 25,000 businesses have accessed the scheme with an average lend of £165,000.

UK Finance suggests that accredited lenders have received just 52,807 applications since the scheme opens. Given there is currently approx. 6m active businesses in the UK it seems unfathomable that just under 1% of British businesses would apply for such a scheme. Businesses need support and the uptake in countries such has Germany and Switzerland has been far greater.

If we take Switzerland as an example, there has been 98,000 approved loans – almost six times more than the UK, despite having a population one-eighth the size.

2 weeks ago the Guardian estimated that over 300,000 businesses had applied for the scheme and if this were the case the approval rate drops from 49% to under 10% which may explain the reporting of these figures. Banks have long come under scrutiny for their underwriting policies and in a time where businesses need support more than ever, it seems like many are not getting the assistance they need.

It has also been reported that some banks have run pre application screenings which aren't being accounted for in the number of applications received by banks.

Whilst it is still fundamental for businesses to approach their banks first, the British Business Bank has announced a new wave of accredited lenders onto the CBILS and as such there should be more options for SMEs to access this funding in the coming weeks. There is also other ways of securing additional funding, be it through receivables finance of asset finance. Securing finance against assets like invoices or assets can prove a clever way of injecting extra finance into the business.

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