Govt may have to pay nearly 40% of pandemic loans

Wednesday 03rd August 2022 06:39 EDT

Around one in 12 businesses have defaulted on the Government-backed loans they took during the pandemic. The Department for Business, Energy and Industrial Strategy revealed that £414 million has so far been paid out to cover loans that have gone bad. The data is still provisional and the final figures are likely to show much higher numbers.
By some estimates the Government might have to pay out to cover nearly 40% of the £77.1 billion that was lent during the pandemic.
During the early days of Covid-19, the Government launched three loan schemes to help out businesses as many were forced to close because of lockdowns. Billions of pounds were paid out by banks. To speed up the loans and to encourage banks to give them out, the Treasury said it would pay up if the businesses were unable to.
For the first time the data shows what banks have claimed the most. Metro Bank and Barclays were the two single biggest claimants so far, with the Government paying them £122 million and £88 million respectively for bounce back loans. These banks have claimed back 8.5% and 0.8% of the money they lent from the Government. Two smaller lenders – Tide and Capital on Tap – have claimed back around a quarter of the money they lend to businesses.

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