UK coronavirus business loan scheme approval rate half of Germany’s

Early Monday morning in Asia, City AM came out with the news suggesting the weakness of the UK’s coronavirus business interruption loan scheme (CBILS).

Key quotes

The UK’s coronavirus business loan scheme has half the approval rate of its German equivalent, data has shown, as chancellor Rishi Sunak mulls the creation of a new program targeted at the country’s smallest businesses.

The latest figures from banking body UK Finance showed on Thursday that 16,600 firms had received loans worth a total of £2.8bn through the coronavirus business interruption loan scheme (CBILS). There was an acceptance rate of 46 percent.

Through CBILS, lenders offer loans worth up to £5m to firms with a turnover of up to £45m. They are 80 percent guaranteed by the Treasury.

The approvals rate pales in comparison to the equivalent German scheme, which also released numbers last week. It has lent €8.5bn (£7.4bn) through state bank KfW to 13,000 firms, with an approval rate of 98 percent.

FX implications

The news fails to offer any major market implications. As a result, GBP/USD remains mostly quiet around 1.2370, down 0.04% on a day, by the press time.