UK Finance data has revealed that banks have paid out just under £292m to just over 2,000 businesses under the Government’s Coronavirus Business Interruption Loan Scheme (CBILS), representing an approval rate of just 0.65%.
The figures come despite Chancellor Rishi Sunak having pledge to cover £330bn of credit, and after the scheme was relaxed last week to make it easier to secure loans. A report from Fideres shows the monthly pay roll of the UK’s 6m SMEs amounted to £41bn, with Alberto Thomas from the firm warning of an “immense wall of redundancies and defaults coming” if the pace of approvals does not rise.
Smith & Williamson partner Giles Murphy has said directors are mulling over winding up their business now instead of taking the risk of handing assets to a bank later, after being required to make personal guarantees on loans.
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