British Business Bank: COVID Schemes Saved 500,000 to 2.9 Million Jobs

The British Business Bank is distributing an “Evaluation Report” on the impact of the COVID loan guarantees that indicates 150,000 to 500,000 businesses were saved and between 500,000 to 2.9 million jobs were maintained.

The report was authored by London Economics and Ipsos. The document covers:

  • The Coronavirus Business Interruption Loan Scheme (CBILS)
  • The Coronavirus Large Business Interruption Loan Scheme (CLBILS)
  • Bounce Back Loan Scheme (BBLS)

These programs were created by the UK government to backstop the economy as COVID caused massive disruptions and mandatory lockdowns ensued as public officials struggled to manage the health crisis. In total, approximately £78 billion in loan guarantees were provided. Around 1/4 of “smaller businesses” participated.

The report states:

  • It is estimated that in the absence of the Covid-19 loan guarantee schemes, an additional 10%-34% of BBLS borrowers (146,000 to 505,000 businesses) and an additional 7%-28% of CBILS/CLBILS borrowers (5,000 to 21,000 businesses) could have permanently ceased trading in 2020.
  • It is also estimated that 0.5 million to 2.9 million jobs could have been lost in the absence of the schemes
  • The most common uses of the funds were working capital and to provide financial security
  • Common actions undertaken by borrowers since raising external finance from one of the schemes included the adoption or expansion of digital technologies, innovation activities or building business resilience.

Many Fintechs, along with traditional financial services, acted as originators for these loans.

Catherine Lewis La Torre, CEO of the British Business Bank, stated:

“The Covid-19 emergency loan schemes were designed to address a drastically altered economic landscape for smaller businesses as lockdowns took effect. This evaluation is the first indication of just how important those schemes were in saving livelihoods, businesses and hundreds of thousands of jobs, and we are proud to have played a vital role in their delivery.”

Martin McTague, National Chair of the Federation of Small Businesses (FSB),  added:

“As the pandemic first took hold, FSB campaigned hard to get as much support for as many small businesses and self-employed as possible. The emergency loans were among the most important lifelines, and the British Business Bank worked collaboratively and effectively with us to make sure there was a guaranteed finance option for even the smallest of businesses. As today’s findings demonstrate, this swift action prevented vast numbers of businesses from going under; protecting jobs, livelihoods, and enabling these firms to be part of the economic recovery.”

The British Business Bank is the UK government’s economic development bank with a mission to support sustainable growth by improving access to capital.

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