7
Conclusion
Thirty-third Report: Covid-19: Bounce B…
Acknowledged
Both Germany and Switzerland delivered schemes to support small and medium- sized enterprises (SMEs) much earlier than the UK.16 Their schemes offered 100% guarantees.17 CBILS, although in place at a similar time, offered an 80% guarantee attempting to remain line with state aid legislation, but unlike other jurisdictions was not …
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Both Germany and Switzerland delivered schemes to support small and medium- sized enterprises (SMEs) much earlier than the UK.16 Their schemes offered 100% guarantees.17 CBILS, although in place at a similar time, offered an 80% guarantee attempting to remain line with state aid legislation, but unlike other jurisdictions was not suitable for the smallest businesses.18 HM Treasury has not taken advantage of the increased support it can provide to businesses in certain sectors, including 20,000 venues in pubs and hospitality.19 Getting the Scheme up and running
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Government response AI summary
The government agrees with the committee's observations and states it is working with the British Business Bank to explore how to further strengthen responses to future economic downturns and ensure resilient support for SMEs of all sizes.
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HM Treasury
8
Conclusion
Thirty-third Report: Covid-19: Bounce B…
Acknowledged
Notwithstanding the lack of preparedness, it is clear that staff at HM Treasury, the Department, and the Bank pulled out all the stops to get the Scheme up and running as quickly as possible; we should not underestimate the level of commitment they have shown in the response to the …
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Notwithstanding the lack of preparedness, it is clear that staff at HM Treasury, the Department, and the Bank pulled out all the stops to get the Scheme up and running as quickly as possible; we should not underestimate the level of commitment they have shown in the response to the pandemic. The Scheme launched within two weeks of HM Treasury proposing it to the Department and the Bank. Once the Scheme was launched, lenders approved 268,000 loans to businesses totalling £8.4 billion in the first week of operations.20
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Government response AI summary
The government acknowledges the Bank's essential role in driving economic growth and affirms that ministers acted quickly to implement the scheme in response to the pandemic's economic consequences.
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HM Treasury
9
Conclusion
Thirty-third Report: Covid-19: Bounce B…
Acknowledged
The Scheme is designed with the objective that borrowers receive the loans within 24–48 hours of a valid application. This target was based on independent research which suggested that one-third of businesses would probably not be able to access enough cash to continue trading for more than two weeks of …
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The Scheme is designed with the objective that borrowers receive the loans within 24–48 hours of a valid application. This target was based on independent research which suggested that one-third of businesses would probably not be able to access enough cash to continue trading for more than two weeks of lockdown. Based on lender’s reports to HM Treasury, the average time from application to receipt of loans for existing business customers was between 24 and 72 hours. However, for some applications it has taken 10 Evidence UK Finance submission para 5 11 C&AG’s Report, para.1.12 12 Q 9 13 As defined by Companies House, businesses which have an annual turnover below £632,000. 14 Q 11; C&AG’s Report, para.1.3 15 Evidence UK Finance submission para 11 16 Q 21 17 C&AG’s Report, Figure 3 18 Q 12 19 Q 4 20 C&AG’s Report, para 11 10 Covid-19: Bounce Back Loan Scheme considerably longer; for new customers, it may take between four and 12 weeks.21 When asked whether the speed of delivery remains relevant at this stage in the Scheme, the Bank determined that given the system in place is successful at distributing cash, there is no need at present to slow it down.22
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Government response AI summary
The government considers the existing application process for the Bounce Back Loan Scheme, including borrower self-certification, to remain appropriate given the ongoing need for quick access to finance, and will consider future approaches for any new schemes.
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HM Treasury