Covid loan bank went through ‘gigantic shift’ as it funnelled £88bn to UK companies

The British Business Bank administered Government-backed loans during the pandemic

August Graham
Wednesday 22 September 2021 00:01
High street banks lend billions to UK companies, supported by the Government guarantee. (Ian West/PA)
High street banks lend billions to UK companies, supported by the Government guarantee. (Ian West/PA)

The boss of the Government-owned bank that helped funnel billions of pounds worth of loans to British companies said it went through a “gigantic shift” during the pandemic year.

Catherine Lewis La Torre told the PA news agency that the British Business Bank which she leads, had an “important role” in the economic response to Covid-19.

Around £80 billion of emergency government-backed loans were paid out to UK businesses during the pandemic, with systems being put in place at speed when the country first started locking down.

Nealy 1.6 million businesses took Bounce Back Loans – small loans of up to £50,000 that were provided by high street lenders, but administered by the BBB.

The bank also looked after the Coronavirus Business Interruption Loans (CBILS), which paid out to 109,877 businesses and the Coronavirus Large Business Interruption Loans (CLBILS).

It turned the BBB from an institution which was backing less than £10 billion of finance to UK companies, to a vital backbone of the economy, supporting 1.8 million businesses with over £88 billion of finance.

“I hope what comes through in the annual report is just what an incredible year it was. I think that’s best reflected in the numbers,” Ms La Torre said.

How much this actually helped the economy, and how businesses would have fared without the support will be impossible to say, but the BBB said the impact on many businesses was likely huge.

“While it is difficult to say exactly what would have happened in the absence of these schemes, it is reasonable to assume that without their support many more businesses may not have survived through the pandemic,” it said.

Alongside the Covid support schemes, the bank continues to help small businesses get loans and investments to grow, supporting £8.5 billion of finance to 95,000 companies.

Small companies now have up to a decade to pay back their Bounce Back Loan.

“We need to be very clear-sighted about how we manage this portfolio of Covid-era loans into the future. And even though these were all introduced in pace in response to the crisis the run-off of these loans – we have to have a 10 year plan for how we do that,” she said.

However the bank expects to “be over the hump” before the ten years is over.

She said the bank is planning for this going into the future, investing in its data analytics among other things.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in