British businesses have borrowed more than £30 billion from three Government-backed coronavirus loan schemes as firms try to stay afloat during the crisis.
Nearly 750,000 businesses have been approved for loans worth more than £31.3 billion, according to Government data released on Tuesday.
The data, which runs up to Sunday last week, revealed that over 963,000 businesses have asked their banks for support as part of the schemes.
Figures show that £21.3 billion has been lent under the Government’s bounce back loan scheme.
The bounce back loan scheme is by far the most popular among businesses, with nearly 700,000 being approved for £21.3 billion in loans.
A further 74,000 firms have not yet been approved for the loans, which require minimum checks and can give a business up to £50,000 in their account within days.
The Government has promised to step in to pay back 100% of the loans handed out by high street lenders, such as Lloyds and Barclays, as part of the scheme.
Experts have warned that the taxpayer could be left with a hefty bill for the bounce back loans, if small businesses start defaulting on their debt to the banks.
Some who spoke to the Financial Times on Sunday warned that up to half of the bounce back loans may never be repaid by businesses.
Last week, Royal Bank of Scotland chairman Sir Howard Davies called for the creation of a holding vehicle that could suck up all the bad debt from the banks.
“Several billion pounds of public money” may never be paid back to the banks, Sir Howard warned, during a panel convened by the Sunday Times.
Fewer concerns have been raised about the Government’s two other schemes, the coronavirus business interruption loan scheme (CBILS) and a similar scheme aimed at larger businesses, called CLBILS.
The Government only guarantees 80% of these loans, and banks are required to do more in-depth checks on the companies that have applied for the cash.
Tuesday’s figures showed that more than £8.9 billion has been lent to nearly 46,000 companies under CBILS, and a further £1.1 billion to 191 companies as part of CLBILS.