Business Secretary Alok Sharma reveals almost 400,000 companies have applied to the government’s furlough scheme in just three days at a potential monthly cost of £7bn as firms warn access to coronavirus loans must be speeded up
- Applications to government’s coronavirus furlough scheme opened on Monday
- Alok Sharma said there had already 387,000 applications up to 4pm yesterday
- Those applications will cover approximately three million furloughed workers
- Meanwhile, government under pressure to improve coronavirus loans scheme
- Here’s how to help people impacted by Covid-19
Business Secretary Alok Sharma today revealed almost 400,000 businesses have made applications to the government’s coronavirus furlough scheme, covering almost three million workers.
The Coronavirus Job Retention Scheme only opened for applications on Monday this week but as of 4pm yesterday some 387,000 firms have applied for help.
Those applications cover 2.8 million workers which means the Treasury is now facing a maximum monthly bill of up to £7 billion so far based on the fact the scheme pays up to £2,500 per worker.
Meanwhile, £2.8 billion has been handed out through a government loan scheme designed to keep small and medium sized companies afloat.
But businesses are urging ministers to urgently speed up the application process in the Coronavirus Business Interruption Loan Scheme (CBILS) with industry groups labelling it ‘too complex and too lengthy’.
More than 38,000 completed applications for loans have now been sent to lenders to assess.
However, the number which have been approved so far is just 16,624 with the others still in the queue waiting to be processed.
Business Secretary Alok Sharma today told MPs that almost 400,000 firms have applied to the government’s furlough scheme in just three days
The government introduced the furlough scheme to maintain the link between employers and employees during the coronavirus crisis.
It allows firms to claim cash grants worth up to 80 per cent of employee wages up to a cap of £2,500 a month per worker.
Furloughed staff are not allowed to work while they are effectively being paid by the state but ministers hope the scheme will allow companies to get back up and running quickly after lockdown while also keeping people financially afloat.
Appearing in front of the Business Select Committee this morning, Mr Sharma revealed the scale of the take up of the scheme.
He said: ‘In terms of the furlough scheme, which is a policy which is led by HMT and being delivered by HMRC, I can tell you that as of last night at 4pm there were 387,000 applications for the scheme and that is covering 2.8 million employees.
‘In terms of the grants, this is the £10 and £25,000 grants that are going out the door, where we have given money to local authorities and they are distributing it, as of April 19 almost half a million businesses have received that money, representing just over £6 billion.
‘In terms of the CBILS scheme… the latest figures have been published today showing that so far there are around 38,000 applications to date and 16,600 businesses have secured a loan, representing a total value of £2.8 billion.’
The CBILS scheme allows small and medium-sized businesses with an annual turnover of up to £45 million to access loans, overdrafts and asset finance of up to £5 million for up to six years.
Stephen Jones, chief executive of the banking industry body UK Finance, said: ‘Frontline staff have been working tirelessly to get money to those viable businesses that need it as quickly as possible, with over £2.8 billion of lending provided to 16,000 firms so far.
‘This lending forms part of a broad package of support provided to SMEs (small and medium sized enterprises) including additional loans, capital repayment holidays, extended overdrafts and asset-based finance.
‘We know businesses want to look after their most important resource – their people – and so lenders are offering additional support to firms awaiting grants from the Coronavirus Job Retention Scheme.
‘We stand ready to support many more businesses in the weeks ahead, and will continue to work closely with the government to ensure businesses can access the support they need.’
However, while the CBILS scheme has been welcomed by businesses, industry bodies are urging ministers to speed up the application and approval process.
The British Chambers of Commerce said many firms are now facing a ‘crunch’ week and need help as soon as possible.
The BCC’s head of economics Suren Thiru said: ‘The increase in companies accessing CBILS is encouraging progress.
‘However, the number of applications processed and approved will need to be increased significantly in what is a crunch week for firms urgently trying to access financial support.
‘Our Coronavirus Business Impact Tracker tells us that a concerningly high number of businesses are still finding accessing the scheme too complex and too lengthy.
‘The government and financial institutions must continue to work together to identify practical steps to improve the workings of the CBILS scheme to ensure that cash gets to the frontline as quickly as possible.’
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