Barclays said it had received some 200 applications in the first minute after it launched the lockdown survival scheme on Monday morning.
All 200 were approved just minutes later, Matt Hammerstein, the chief executive of Barclays UK, told the Treasury select committee. In the hours that followed, the bank fielded around 35 applications every minute.
“The process to be able to get access to the money is super simple,” he said, adding: “We’d expect the cash to be with those clients over the course of the next 24 hours.”
Bank of Scotland-owner Lloyds also revealed that its customers had sent around 2,000 request for bounce-back loans, with an average loan size of £35,000, in the first two hours after it opened its doors in the morning.
“We do expect a really quite significant volume flowing through to the bounce back loans,” said David Oldfield, the chief executive of commercial banking at Lloyds.
Businesses are asked in a two-to-three-page online application what their turnover is and how much money they want to borrow, along with some other details.
Chancellor Rishi Sunak announced the bounce back loan scheme a week ago.
He promised a UK government guarantee for 100 per cent of the risk the banks are taking in lending businesses up to 25 per cent of their turnover to help them bounce back from the coronavirus crisis, up to a maximum of £50,000.
The Treasury has promised to cover the interest on the loans for the first 12 months.
Sunak told MPs: “I know that some small businesses are still struggling to access credit. They are in many ways the most exposed businesses to the impact of the coronavirus and often find it harder to access credit in the first place.”
Businesses will borrow at 2.5 per cent interest.
Industry leaders have been generally positive about the bounce-back lending scheme.
Federation of Small Businesses national chairman Mike Cherry said: “While the volume of Coronavirus Business Interruption Loan Scheme lending has almost doubled over the last week, the average value of facilities secured through the scheme remains high.
“This initiative has not worked for the small firms that make-up 99 per cent of our business community: customer service has been poor, the application process has been arduous, and the wait times for decisions have been lengthy.
“The new bounce-back scheme offers real hope in this space. We’re several weeks into lockdown – with many business owners having to pay wages, utility bills and rent with no revenue coming in – so its launch can’t come soon enough. In future, we’ll have to assess how [it] has impacted market competition.”
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