Only 1.4% of companies inquiring about UK coronavirus business loans have been successful | Coronavirus

The government has admitted that only 1.4% of companies that inquired about it Coronavirus Business Disruption Loan Scheme (CBILS) have been successful so far.

Almost three weeks after the chancellor Rishi Sunakfirst launched the program to provide small and medium-sized businesses with loans and other financing of up to EUR 5 million each.

Tens of thousands of companies are said to have made formal applications, but amid allegations of excessive red tape and lenders’ reluctance to lend, only a fraction got the green light.

Alok Sharma, the business secretary, revealed the lack of progress as pressure mounts on officials and leading banks to speed up the processing of loan applications before thousands of companies go bust.

Sunak has responded to criticism of slow progress by hiring former Bank of England adviser Richard Sharp as an adviser tasked with speeding up bailout processing.

Sharp, a former Goldman Sachs banker who was head of investment bank Sunaks during the chancellor’s tenure, was a member of the bank’s fiscal policy committee, which worked with incoming governor Andrew Bailey.

Sunak expects to announce Sharp’s appointment this week. He also expects to unveil plans to expand the loan program to companies with sales over $500 million.

Sharma told Sophy Ridge on Sunday: “The last figure I have is around 4,200 and just over £800million has been spent.

“I’ve spent the last few days speaking directly to some of the largest lenders that are part of this scheme and I’ve told them very clearly that we need to get money out the door as soon as possible. You understand that … we set this up quickly and everyone is working literally 24/7.”

When asked that the current numbers represent a success rate of just 1.4%, he didn’t dispute that number. When asked if he was worried, the business secretary said: “Well, of course. It’s not just that I’m worried – I totally understand the concerns of companies.”

This was announced by the British Chamber of Commerce on Wednesday only 1% of the companies that took part in the survey had managed to get a loan under the program, while 7% had received one of the small business grants offered by the Treasury.

On April 3, Sunak relaxed the criteria for CBILS loans and Banks banned from demanding personal guarantees from small businesses seeking help.

On Sunday the Observer reported that Ed Miliband had done so urged Sharma to overhaul the scheme low take-up by small and medium-sized companies.

The informal economy secretary said thousands of companies were on the brink of collapse and that without greater government involvement they were likely to go bust. “The risks of doing too little and too slowly to help businesses are far greater to the long-term health of the economy than the risks of doing too much and too quickly,” he said.

A shortage of available bank staff is understood to have delayed initial applications, although bank employees are considered key workers.

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