Questions Put to The Government Since August 2021 and the Official Responses Regarding Bounce Back Loans – Including a Proposal for Another 12 Month Delay on Repayments

I spent a little bit of time reading through the most recent written questions from MPs and Members of the House of Lords put to the Government regarding BBL’s to see if anyone in Government is actually battling for SMEs who are or why may soon be about to struggle to repay them.

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Obviously, the replies to most of the questions asked are the usual scripted waffle but read on as you will get some idea of which MPs are at least asking the right questions.

Any changes to the Bounce Back Loan scheme and/or any additional help and support for SMEs (if any), are likely to be announced on the 27th of this month when Rishi gives his Autumn Budget.

As such, below you will find the questions asked from August the 1st of this year and the response from the Government below:

Carla Lockhart – Democratic Unionist Party – Upper Bann

“To ask the Secretary of State for Business, Energy and Industrial Strategy, how many companies that availed of bounce back loans have (a) filed for bankruptcy and (b) indicated that they will not be in a position to repay their loans.”

Answer – Paul Scully – Conservative – Sutton and Cheam – Answered on 23 September 2021

“Data on the number of companies with a Bounce Back Loan that have entered formal insolvency procedures will be collected in due course.

It is too early to provide figures relating to repayments given many businesses have yet to begin repaying their Bounce Back Loan. Further information related to loan repayments for the Government’s Covid-19 loan schemes will feature in the BEIS 2020-21 Annual Report and Accounts, scheduled for publication later this year.”

Owen Thompson – Scottish National Party – Midlothian

To ask the Secretary of State for Business, Energy and Industrial Strategy, what estimate he has made of the number of people who will be repaying (a) Coronavirus Business Interruption Loan Scheme and (b) Bounce Back Loan Scheme debt during retirement.

Answer – Paul Scully – Conservative – Sutton and Cheam – Answered on – 23 September 2021

The Government’s Covid-19 loan schemes have provided a lifeline to millions of businesses across the UK – helping them survive the pandemic and protecting millions of jobs. As of 31 May 2021, over £26 billion has been lent through the Coronavirus Business Interruption Loan scheme, and over £47 billion has been lent through the Bounce Back Loan scheme, for a total of nearly £74 billion.

Age is classed as personal data which is not held by the British Business Bank. Where loans have been taken out by companies, it is those companies that are responsible and any liability remains with the company entity, not individuals.

Lord Taylor of Warwick – Non-affiliated – Life peer

To ask Her Majesty’s Government what plans they have to give struggling companies the option to convert emergency bounce back loans into Employee Ownership Trusts to support their post-pandemic recovery process.

Answer – Lord Callanan – Conservative – Life peer – Answered on – 23 September 2021

The Government launched the Bounce Back Loan Scheme (BBLS) to ensure that the UK’s smallest businesses could access loans of up to £50,000 to help businesses through the pandemic. Under BBLS, no repayments are due from the borrower for the first 12 months of the loan. The Government also covers the first 12 months of interest payments charged to the business by the lender.

We have always been clear that businesses are responsible for repaying any finance they take out. However, we recognise that a diverse range of businesses have taken out Bounce Back Loans and some of these will benefit from more flexibility in making their repayments. That is why the Government introduced the “Pay as You Grow” measures, which allow borrowers to tailor their repayments to their individual circumstances. “Pay as You Grow” provides borrowers with the option to:

Extend the length of their loan from six years ten

Make interest-only payments for six months, with the option to use this up to three times throughout the loan

Pause repayments entirely for up to six months

Borrowers can use these options either individually or in combination with each other. In addition, they have the option to fully repay their loan early and will face no early repayment charges for doing so.

The Government is not currently considering proposals to convert outstanding Bounce Back Loans into equity.

Stephen Farry – Alliance – North Down

To ask the Chancellor of the Exchequer, what steps his Department is taking to mitigate potentially anti-competitive consequences of the Government’s lending schemes via the (a) Bounce Back Loan, (b) Coronavirus Business Interruption Loan and (c) Coronavirus Large Business Interruption Loan for the UK banking sector.

Answer – John Glen – Conservative – Salisbury – Answered on – 20 September 2021

Over 1.6 million businesses accessed over £79 billion of finance through the Covid-19 business loan schemes. The Treasury recognises the vital role that non-banks and challenger banks play in the provision of credit to SMEs. It is grateful for the way the sector has responded to the current crisis, and remains committed to promoting the participation of a diversity of lenders in the market and widening the funding options available to UK businesses.

We will continue to work with non-bank lenders to support their participation in the new Recovery Loan scheme following the closure of the previous loan guarantee schemes, as well as engaging closely with alternative lenders and continuing to promote competition more generally.

Colleen Fletcher – Labour – Coventry North East

To ask the Chancellor of the Exchequer, what fiscal steps his Department is taking to help small and medium-sized businesses in (a) Coventry North East constituency, (b) Coventry, (c) the West Midlands and (d) England recover from the covid-19 outbreak.

Answer – Helen Whately – Conservative – Faversham and Mid Kent – Answered on – 20 September 2021

Throughout the pandemic, the Government has provided historic levels of support to the economy. This is a total of £352 billion, delivered through job and income support, tax reliefs and deferrals, and cash loans and grants for businesses. However, the Government recognises that it takes time for businesses and the economy to bounce back – this is why many of the pillars of the support package announced at the Spring Budget were set to last well beyond the end of the Roadmap.

Over the course of the pandemic the Government has made up to £25 billion in cash grants available to protect businesses of all sizes in England and the jobs they support. Over £2 billion of discretionary business grant funding has been provided to local authorities via the Additional Restrictions Grant (ARG) fund, including a £425 million top-up announced at the Budget. A significant proportion of this £2 billion is still with local authorities and available to be allocated to businesses, including small and medium sized businesses, in need of support.

Businesses throughout the UK can also benefit from the Recovery Loan Scheme, which runs until the end of the year. This ensures viable businesses continue to have access to Government-backed finance they need throughout 2021.

Businesses of all sizes have been supported through the Coronavirus Job Retention Scheme (CJRS) and Self-Employed Income Support Scheme (SEISS), which have provided a total of £68.5 billion and £27 billion in support respectively to date. The CJRS has supported approximately 21,000 jobs in the Coventry North East constituency since its inception, and the SEISS has had over 15,000 claims in this area.

There is also significant continued relief on business rates and VAT for retail, hospitality and leisure sectors for this financial year. And the commercial rent moratorium has been extended until March 2022.

Justin Madders – Labour – Ellesmere Port and Neston Commons

To ask the Secretary of State for Business, Energy and Industrial Strategy, what the total amount is of funds approved under the (a) Bounce Back Loan scheme and (b) Coronavirus Business Interruption Loan scheme for businesses in Ellesmere Port and Neston constituency.

Answer – Paul Scully – Conservative – Sutton and Cheam – Answered on 16 September 2021

The analysis of final Coronavirus loan scheme data was published on July 6, 2021 on the British Business Bank website.[1]

Under the Bounce Back Loan Scheme, 1,560,309 loans were delivered in total, to the sum of £47.36 billion.

Under the Coronavirus Business Interruption Loan Scheme, 131 loans were offered in the Ellesmere Port and Neston constituency, to the sum of £31,605,525. Under the Bounce Back Loan Scheme in the same constituency, 1461 loans were offered, to the sum of £39,697,177.

In total, 1592 loans were offered across the constituency, to the sum of £71,302,701.

[1] https://www.british-business-bank.co.uk/press-release/analysis-of-final-coronavirus-loan-scheme-data-shows-79-3bn-of-loans-to-1-67m-businesses-evenly-distributed-across-whole-of-the-uk/

Charlotte Nichols – Labour – Warrington North Commons

To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will make it his policy to delay the repayment of bounce back loans by 12 months.

Answer – Paul Scully- Conservative – Sutton and Cheam – Answered on – 13 September 2021

The Government has already taken action to give businesses the space and flexibility to repay their bounce back loans. Under the Bounce Back Loan Scheme (BBLS), no repayments are due from the borrower for the first 12 months of the loan. The Government also covers the first 12 months of interest payments charged to the business by the lender.

In order to give businesses further support, the Government introduced the “Pay as You Grow” (PAYG) measures last year, which allow individual businesses to tailor their repayments to their individual circumstances. Under these measures, the lenders are required to give all businesses that borrowed under the BBLS the option to repay their loan over a period of up to ten years, as well as the option to move temporarily to interest-only payments for periods of up to six months, or to pause their repayments entirely for up to six months.

Owen Thompson- Scottish National Party – Midlothian

To ask the Secretary of State for Business, Energy and Industrial Strategy, what guidance the Government has issued to (a) Coronavirus Business Interruption Loan Scheme and (b) Bounce Back Loan Scheme private lenders on borrowers seeking to refinance or restructure their debt.

Answer – Paul Scully – Conservative – Sutton and Cheam – Answered on 8 September 2021

The Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme are delegated schemes, so it is for lenders to manage relationships with their borrowers. Lenders are expected to follow their normal commercial process when assessing restructure/refinance requests.

Owen Thompson – Scottish National Party – Midlothian

To ask the Secretary of State for Business, Energy and Industrial Strategy, what ongoing data his Department is collecting on repayment rates for the (a) Coronavirus Business Interruption Loan Scheme and (b) Bounce Back Loan Scheme debt.

Answer – Paul Scully – Conservative Sutton and Cheam – Answered on 8 September 2021

Bounce Back Loan Scheme lenders are required to notify the British Business Bank of any prepayment or repayment of a Scheme Facility via the Bank’s dedicated online portal. This reporting includes data such as the number of borrowers who have repaid their loan in full, and the number of borrowers who have taken up ‘Pay as you Grow’ measures.

Coronavirus Business Interruption Loan Scheme lenders may, but are not required to, notify the British Business Bank of repayment of loans through this same portal.