Figures just released show Britain’s lenders have provided £27.5 billion in financial help to more than 650,000 firms affected by the Covid-19 lockdown so far.
The money has come through the three main government-backed lending schemes of the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Grants under the Self-employed Support Scheme have provided a further £18.45 billion in just over a fortnight.
These differ from the business loans as they are direct grants of 80% of a self-employed person’s profits over three months and do not have to be paid back.
Stephen Jones, chief executive of the banking industry’s trade body UK Finance, said the loans and grants were only part of the financial help being offered to firms affected by the virus lockdown.
Additional help was being provided by working capital facilities, overdraft extensions, capital repayment holidays and asset-based finance.
He said: “The banking and finance industry has a clear plan to help businesses get through these tough times.
“Lenders are providing an unprecedented level of support to firms affected by the Covid-19 crisis, with a further £20.5 billion drawn under bank arranged commercial paper facilities.
“It’s important to remember that any lending provided under government-backed schemes is a debt not a grant, and so firms should carefully consider their ability to repay before applying.”
To date the government has not placed a time limit on when firms can apply for assistance and more applications are expected as the lockdown restrictions continue.
The same is not true for the Job Retention furlough scheme. The government is currently paying 80% of the wages of more than 8.4 million workers at a total cost of £11.1 billion.
Chancellor Rishi Sunak has extended the scheme to the end of October to prevent a ‘cliff-edge’ of mass unemployment, but he has said he expects firms to start to share the responsibility for payments by August.
No date has yet been set for the full withdrawal of support with the government concerned about the levels of unemployment.
The hope is that most people will return to work, but it is inevitable that some people will lose their jobs.