UK lends 18 billion pounds to small firms hit by coronavirus

LONDON (Reuters) - British small businesses have borrowed more than 18 billion pounds ($22 billion) under a government-guaranteed coronavirus credit programme during its first three weeks of operation, outpacing bank lending under other schemes for bigger firms.

The finance ministry offers banks a 100% credit guarantee on loans of up to 50,000 pounds under its Bounce Back Loan Scheme, after an 80% guarantee slowed lending under an earlier programme.

The BBLS has lent 18.49 billion pounds to 608,069 small businesses as of May 24, up from 14.2 billion pounds by May 17.

By contrast an earlier programme that lends up to 5 million pounds, the Coronavirus Business Interruption Loan Scheme, has only lent 8.15 billion pounds since its launch in March.

Banks have approved about half of loan applications under CBILS so far, compared with 79% for the BBLS.

Finance minister Rishi Sunak initially opposed offering full state guarantees for bank lending, due partly to the risk of bad debts, but allowed it for the smallest firms after pressure from business groups, legislators and the Bank of England.