About 21% of applications so far received for the government’s SME stimulus package have been approved by British banks and finance houses, according to UK Finance.

The banking and finance lobby group said of the 28,460 formal applications so far received under Coronavirus Business Interruption Loan Scheme (CBILS), its members had approved 6,020 of these applications, worth £1.1bn.

The government’s total business rescue package is approximately £330bn. 

This lending figure is almost twice the 3,309 issued last week and represents a 150% rise in the total amount lent to SMEs – worth an additional £700m, UK Finance said in a statement. 

Since the launch of CBILS, the scheme administrators (the British Business Bank) and the government have come under criticism for being slow to provide funds.

A recent survey released by the British Chambers of Commerce (BCC) showed that just 2% of respondents had successfully accessed the CBILS scheme (double the previous week’s figure), while 9% had been rejected or were still waiting for a reply. 

The weekly Coronavirus Business Impact Tracker, published by British Chambers of Commerce (BCC), found that 17 per cent of firms have less than a month’s cash in reserve, with 36 per cent reporting one to three months of cash reserves.

The BCC survey was based on 701 responses to a poll carried out between 8 and 10 April.

Adam Marshall, director-general of the BCC, said: “Businesses on the frontline need cash to start flowing from support schemes fast. With April’s payday coming up, we are fast approaching a crunch point, and both the furlough scheme and CBILS facilities need to be accelerated.”

Mervyn King, the former Bank of England governor, told Sky News last week that the survival of businesses was key to getting the UK economy back on track post-Covid-19.

He said: “The economy will recover quickly only if we can keep the businesses that existed at the beginning of it still functioning and still able to pick up the reins when the epidemic is over.”

Just over 40 lenders are issuing CBILS loans via the British Business Bank. 

UK Finance said the number of loans approved each day continues to rise, increasing from 240 on 2 April to 910 on 8 April, with a further 1,800 loans worth over £300m recorded over the bank holiday weekend.

Total lending under the scheme has increased rapidly from £453m on 6 April to £1.115bn a week later, while the average value of a CBILS loan has grown to over £185,000.

UK Finance is the collective voice for the banking and finance industry. Representing more than 250 firms across the industry. Its members include both large and small firms, national and regional, domestic and international, corporate and mutual, retail and wholesale, physical and virtual, banks and non-banks.

Stephen Jones, chief executive of UK Finance, said: “The banking and finance sector recognises the challenging conditions faced by many businesses and the critical role we must play in helping the country get through this crisis.

“Frontline staff in local branches and call centres are working incredibly hard to help firms access finance as quickly as possible amid unprecedented demand. Like all businesses, they are working at reduced capacity as many staff are self-isolating or looking after family.

“I am grateful that so many colleagues worked through the bank holiday so that over one billion pounds of support has now been delivered to businesses. We expect this figure to continue to grow rapidly as lenders work hard to help get Britain through the current crisis.”