Over 1 Million Companies Helped by Virus Support Schemes

Around 1.17 million companies across the UK have so far been helped financially by government-backed emergency coronavirus support schemes.

The official figures from the Treasury make clear just how important these schemes have been to ensuring the survival of a huge number of businesses throughout the country.

Most businesses to have accessed government-backed support so far are either small or micro companies, with around £33.7 billion believed to have been borrowed by 1.1 million small scale operators via the Bounce Back Loan Scheme (BBLS).

Meanwhile, around 57,000 larger companies are understood to have borrowed money at a more significant scale via what is officially known as the Coronavirus Business Interruption Loan Scheme (CBILS).

A separate scheme designed to provide support to very big companies has so far been used by 457 major employers nationwide.

In total, more than £49 billion is estimated to have been distributed through financial services companies acting as lenders on behalf of the government’s main coronavirus support programmes.

“As the Covid-19 crisis continues, the banking and finance industry is committed to helping the nation’s businesses through these tough times,” said Stephen Pegge from UK Finance, the trade organisation that represents British banks and other lenders.

“This support is just one part of the industry’s wider plan to help businesses in the UK, including commercial lending, capital repayment holidays, extended overdrafts and asset-based finance,” he added.

The various financial support schemes created by government in response to the coronavirus crisis have helped thousands of businesses avoid collapse in recent months but many are nonetheless faced with exceptionally tough trading conditions and a longer term fight for survival.

It is unclear currently how many of the 1.17 million businesses to have borrowed money via government-backed support schemes will ultimately prove able to repay what debts they’ve taken on.

There are expectations among some lenders that significant proportions of the money borrowed as emergency business loans might never be repaid.

Mr Pegge from UK Finance has highlighted the fact that loans given to businesses via government-supported schemes recently are issued as debts and not grants.

“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,” he said in a recent statement.