According to final official estimates, the UK government has spent £ 80bn ($ 100.8bn) supporting businesses with COVID-19 loans.
The Treasury said Tuesday that banks have provided 1.6 million in loans to businesses through government-backed support schemes such as Bounce Back Loans, Coronavirus-Related Business Interruption Loans (CLBILS) and the Future Fund. Various schemes were immediately put in place last year to give businesses access to quick and cheap money to keep them afloat during the worst phases of the pandemic.
The first lending schemes were opened in March 2020 and closed on March 31, 2021. Lenders participating in the programs had to complete the processing of applications by the end of May.
Repayable loans made up the bulk of lending, with over £ 47 billion in disbursements last year. The scheme allowed small businesses to borrow up to £ 50,000 with minimal checks. The loans are 100% secured by the state.
£ 26 billion has been made through Coronavirus Business Interruption Loans (CBILS) and over £ 5 billion large business interruption loans (CLBILS) have been offered.
An additional £ 1.12 billion was provided to 1,140 fast-growing companies through the Future Fund. The scheme, closed on 31 January, was designed to support innovative UK companies that typically rely on equity rather than debt.
“I am proud of the extraordinary degree of support we have provided since last March – we will continue to support businesses and protect people’s jobs as we recover from the coronavirus,” UK Chancellor Rishi Sunak said in a statement.
The total amount of the credit support does not include the wage subsidies provided by the government under the vacation scheme. The Treasury has spent more than £ 65 billion paying salaries to people under this scheme.
Businesses can continue to access government-backed loans through a new recovery loan scheme that opened in April and runs through the end of the year. Startups will also have access to a new Future Fund: Breakthrough scheme, scheduled to launch later this month. Both offer less generous terms than last year’s equivalents.
Businesses also continue to benefit from vacations, commercial rates and VAT cuts, as well as an extended moratorium on commercial evictions.
The government introduced the Pay as You Grow scheme to support businesses paying off coronavirus-related loans. Businesses can suspend payments for up to six months and extend repayment periods from six to ten years.
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