Lloyds Bank comes under fire for its ‘disappointing’ efforts to help small businesses through coronavirus crisis
Lloyds Bank has come under fire for its ‘disappointing’ efforts to help small businesses through the coronavirus crisis.
Though it is one of the largest lenders to the UK’s small and medium-sized businesses, accounting for around a third of the big five banks’ market share, it has only approved a tiny percentage of loans made under the Government’s Coronavirus Business Interruption Loan Scheme (CBILS).
And potential borrowers have been left stunned after Lloyds offered them a nine-page ‘pre-application document’, which asked them for detailed information before they could even start applying for CBILS cash.
Under fire: Lloyds Bank chief executive Antonio Horta-Osorio, pictured with wife Ana
Mike Cherry, national chairman of the Federation of Small Businesses, said: ‘If you’ve captured almost a third of the small business banking market then you really should be pulling your weight at this time of national emergency – futures depend on it.
‘Asking business owners to complete pre-application forms is unacceptable.’
The Government has repeatedly urged banks to boost their lending under the scheme, to give a lifeline to the companies which are struggling to make ends meet during the coronavirus lockdown.
Yesterday Chancellor Rishi Sunak unveiled his latest modification – Bounce Back Loans for very small businesses that want to borrow up to 25 per cent of their turnover, to a maximum of £50,000.
The Treasury will bear 100 per cent of any losses that banks suffer under these loans, compared to its 80 per cent guarantee on the standard CBILS loans.
And now all Government-backed loans, made under the Bounce Back scheme or CBILS, will not require lenders to assess whether a business is viable going forward – only whether it was viable before the pandemic struck.
The changes came as Sunak announced 20,000 loans had been made under the CBILS scheme so far, up from 16,624 last Thursday.
He added that the Bank of England’s Covid Corporate Financing Facility, which lends to larger businesses, had provided £14 billion, while more than 500,000 companies had claimed taxpayer support to pay wages under the Coronavirus Job Retention Scheme.
These claims, to the value of £4.5 billion, had allowed 4m workers to be furloughed on 80 per cent of their wages rather than being made redundant, Sunak said.
‘Many are worried that the new schemes will have little effect unless banks – especially Lloyds – embrace the responsibility handed them to lend and keep the economy going.’
Kevin Hollinrake, co-chairman of the All-Party Parliamentary Group on Fair Business Banking, said: ‘The banks have the opportunity to redeem themselves from the financial crisis.’
A Lloyds spokesman said: ‘We increased the number of CBILS we have approved by more than 25 per cent today.
‘We no longer have a lengthy form for customers to complete.’