UPDATED: Only one in nine UK firms seeking help from the government’s coronavirus emergency loan scheme has managed to secure any cash, claims the British Chambers of Commerce.
Just 13 per cent of all firms who attempted to access emergency coronavirus business loans have been successful, with the majority are still awaiting a decision or being rejected, according to the latest BCC weekly tracker poll.
However, 57 per cent of firms surveyed by the BCC, did not intend to apply for a Coronavirus Business Interruption Loan (CBIL) at all due to concerns they would not be able to repay the loan.
Just 20 per cent of the 700 businesses surveyed said they had attempted to access coronavirus emergency business loans.
>See also: How do I apply for a Coronavirus Business Interruption Loan?
Of those who did apply, 48 per cent said they were still waiting for a decision and 40 per cent said they had been rejected for a loan.
Treasury rejects figures
However, the Treasury rejects the BCC’s figures saying that more than 40,000 applications have already been received for these loans and roughly half have already been approved.
A Treasury spokesman said: “These figures are wrong … lenders are working quickly on the remainder [of yet to be approved loans] and approval rates are high.”
The latest BCC poll was conducted between April 22 and April 24, so does not take into account the chancellor’s new Bounce Back Loans scheme, which is due to launch on Monday, May 4 and is hoped to open the floodgates for cash-starved microbusinesses.
>See also: Microbusiness £50,000 Bounce Back Loans – how they work
Adam Marshall, director general of the BCC, said CBILS decisions needed to be made more quickly and told ministers to keep an open mind over further changes to help debt-averse businesses.
Marshall said: “It may become necessary for the government to consider grants, rather than loans, for some of our hardest-hit firms concerned about taking on debt amid unprecedented economic challenges.”
The survey highlights the backlog of loan applications, given that, according to the Federation of Small Businesses, another 15,000 loan applications are waiting to be processed through CBILS.
According to the Treasury, some £3.3bn of funding has been handed out through 20,000 CBILS loans. Banking industry group UK Finance’s figures show 36,000 completed applications, but these figures do not include enquiries or firms which failed to complete the process.
Up to £330bn of funding has been made available for the CBILS scheme.
Find your small business coronavirus grant – list of English councils