Government Support Exceeds £100bn
The Treasury, HMRC and the Bank Of England have shared figures that reveal businesses have received billions of support from the state.
In this blog we are breaking down how much has been claimed across the support, and consider the warning signs for the UK’s economy.
CBILS Support: (£11 Billion)
The CBILS, which was the first scheme announced, has had £9.5billion borrowed from, whereas the larger scheme has had £1.5billion from it.
This loan scheme allows businesses to loan up to £5million, at interest rates decided on by the lenders. 80% of these loans are guaranteed by the government.
The Bounce Back Loans: (£23.7billion)
The Bounce Back Loans are 100% guaranteed by the state, and £23.7billion has been borrowed from this – the most popular by far!
The scheme is aimed at Small Businesses looking to loan up to £50,000, with a fixed 2.5% interest rate, and the first year interest free.
The Future Fund (£55.9 million)
The Future Fund is the least well known of the support, and has a focus on backing startups through convertible loan notes – which are financed by the government.
£55.9million has been invested into this fund by the government.
Job Retention Scheme (£19.6billion)
Businesses have claimed £19.6billion to cover the wages of furloughed employees through this scheme.
It’s reported that nearly 9 million people have been furloughed during this time.
Government Grants (£10 billion)
Small businesses, retailers and hospitality businesses have also received £10billion in government grants.
Other Areas Of Support (£50 million)
Other areas of government spending have gone towards the COVID Corporate Financing Facility, deferred VAT payments and business rates holidays.
These total at an extra £50billion worth of support.
Self Employed Support (Not Included)
These figures don’t include the government support given to the Self-Employed, as that support benefits individuals rather than businesses – but it’s safe to say that we’re talking big numbers over the past few months.
The Worst Year For The UK Since 1710
The total of the unprecedented packages are cause for alarm, with warnings of a steep recession from many economists.
Only 1% of businesses have gone under as a result of the pandemic, but Deutsche Bank warned that this is set to be the worst year for the UK economy since 1710.