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Law360, London (January 29, 2021, 3:58 PM GMT ) Banks and the financial services sector have provided almost £71 billion ($97 billion) of funding to businesses under a basket of government-backed lending programs designed to help companies pull through the COVID-19 crisis, according to a trade body.
More than half of the financing went to the Bounce Back loan scheme, which the government rolled out in May 2020, and has supported small businesses with £45 billion, UK Finance said, quoting HM Treasury data.
Larger businesses were given £5.1 billion in loans under the COVID-19 help program designed for bigger companies that was launched in April, the group, which represents banks and building societies, said on Thursday.
Another program, the Coronavirus Business Interruption Loan Scheme, which took off in March and is designed for small and midsized enterprises, funded more than 87,000 companies.
"As economic uncertainty due to the pandemic continues, many individual businesses and some specific sectors are facing significant and extended disruption and may find themselves in financial difficulty," Stephen Pegge, managing director of commercial finance at UK Finance, said.
More than 39,000 small businesses received a Bounce Back loan in the past month, and over 80,000 companies "topped up" their lending from the program — using the full £50,000 that the scheme offers.
Government agencies have raised concerns that the Bounce Back program could have been targeted for fraudulent purposes, even by bank staff.
The National Crime Agency said this week it arrested three bank workers over fraudulent claims on the scheme totaling £6 million. The agency did not name the financial institution, or the three men, who were later released as an inquiry continues into their activities.
The banking sector also announced mortgage "payment holidays" in March 2020 as the government urged lenders to help homeowners survive the troubles wrought by COVID-19.
--Additional reporting by Joanne Faulkner. Editing by Joe Millis.
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