More than £ 40 billion has been loaned under four government loan programs designed to support businesses during the coronavirus pandemic.
The Treasury has revealed that rebound bank loans to businesses reached £ 28.1 billion through June 21 for 921,229 companies, out of 1.12 million applications. The loans are 100% guaranteed by the taxpayer.
A separate Coronavirus Business Interruption Loan (Cbils) program, which the government launched ahead of the rebound program, reached £ 10.53 billion for 50,482 companies, with the taxpayer guaranteeing 80% of the loan.
A third Coronavirus Business Interruption Loan (Clbils) program for large companies unable to access the Bank of England lending program has loaned £ 2.1bn to 315 companies, and 236, An additional £ 2million in loans has been made under the government’s Future Fund.
The leave scheme closed to new requests earlier this month, and employers will have to start making mandatory contributions to the scheme from August to cover national insurance and pension contributions.
By the end of October, the program will end, leading companies and unions to urge the government to come up with plans to avoid mass unemployment later in the year.
Businesses have been forced to rely on government aid to stay open during the Covid-19 crisis, as attempts to stop the spread of the disease have forced them to send their staff home and close their doors.
Chancellor Rishi Sunak has vowed to do everything in his power to support the UK economy during the lockdown, after the government ordered people to stay indoors in March.
It allows a business to take out a loan of up to £ 50,000 with a 100% government guarantee, although there are already concerns that the scale of defaults is substantial.
Ministers hope that with permission to reopen non-essential stores in England last week, plans to reopen pubs on July 4 and an expected easing of social distancing from two meters to one meter, businesses can recover without leaving scars on sections of the economy.