The U.K. is under pressure to get coronavirus-related loans out faster, and some banking officials want the government to consider making them 100 percent state-guaranteed, as opposed to relying on the banks to take the risks.
U.K. Finance Chief Executive Stephen Jones said the process of checking whether companies can repay the loans is more time-consuming than in countries like Germany, where the loans are all state-backed.
There is currently a massive backlog of loans for amounts under 25,000 pounds, which could be issued much quicker if the government took on all of the risk. Under the current system, according to Jones, banks take on about 20 percent of the risk.
According to Jones, the backlog could be more efficiently handled if the rules on loans were loosened. However, Jones told Parliament’s Treasury Select Committee that “a few more days of patience” would be advisable.
The loans, which are intended to help people in the wake of the viral pandemic that has forced “normal” human life and work to shut down, have helped people to continue paying bills and buying food and other essential items.
There have been other measures to try and stimulate the economy. For example, the government has asked regional governmental bodies to negotiate higher procurement card limits of 20,000 pounds for single-limit transactions and 100,000 pounds for key cardholders, along with a 100,000 pound monthly limit for business needs.
In other news, Funding Option has enacted an open banking deal with 20 non-traditional lenders, hoping to speed up loans and get people paid.
More action will likely need to be taken in the future, with bankruptcy on the horizon for many businesses that cannot sustain themselves. Construction rates and new car registrations have slumped and consumer confidence is low.