Government-backed loan scheme for SMEs

Douglas Grant, Director of Conister, provides comments on the new Government-backed loan scheme for SMEs.

We fully support the UK Government’s plans to launch a permanent replacement for the £65bn Covid loans programme to support SMEs. The BBLS and CBILS have played instrumental roles in keeping many resilient SMEs alive during this uncertain year. While demand has exceeded supply, the schemes have acted as important triage systems to identify and support viable businesses that need credit the most and in doing so, provide a boost to the health of the UK SME segment as a whole.

As an alternative lender, Conister received an initial allocation limit of £10m for the BBLS scheme and so far, we have received 4,607 applications with a total amount of £162,739,000 – most of this was within 72 hours of going live. We have so far approved 60% of these applications. Without doubt, the scale of applications is enormous and while SMEs are the lifeblood of the economy and where innovation and creativity happens, it is crucial that priority is given to resilient businesses to allow them to pivot their business models for the new normal. This more permanent financial support from the Government will be welcome news to those resilient SMEs that have already shown extraordinary levels of adaptability and strength in the face of changing consumer behaviour.

However there still needs to be continued tripartite level of sustainable support from Government, alternative and traditional lenders working together to identify and protect the more resilient sectors of the economy, ensuring their existence is guaranteed. After vital financial aid, SMEs need the Government to support their sectors with widespread and long term growth initiatives that allow them to flourish. We are determined and absolutely focussed on working with companies to protect those robust businesses operating in sectors that ultimately will grow stronger with the necessary capital in the long term. We truly believe that the UK’s SME sector will emerge from this crisis a more resilient and stable sector than ever before.