12.4% of BBLS loans in arrears

The findings come off the back of a Freedom of Information request made to the British Business Bank by Purbeck Personal Guarantee Insurance. The 193,377 arrears figure makes up 12.4% of the total number of BBLS advanced. 

It compares with the most up-to-date official figure from the British Business Back of 106,000 bounce-back borrowers as of the end of September 2021. 

In value terms, this equates to £5.7bn of loans by capital outstanding. Making up the 193,377, 151,587 were in arrears of 90 days or more with a loan on average of £29,660. 

The first 12 months of fees and interest were paid for by the UK government. In total £984m was paid for by the UK government in respect of interest on BBLS facilities. 

Those businesses in arrears that took on a Coronavirus Business Interruption Loan Scheme (CBILS) were comparatively small, making up just 0.1% of the total number of CBILS advanced. In value terms, this equates to £282m of loans by capital outstanding - with the average loan in arrears equating to £164,000. 

In total £1.4bn was paid for by the UK government in respect of interest on CBILS facilities. An additional £271m was paid for by the UK government in arrangement fees paid to lenders. 

As for the recovery loan scheme, to date £3.7bn worth of facilities have been agreed - of which, £716m are supported by personal guarantees as part of the security - or a total of 19%. The average loan balance for personal guarantee support facilities was £538,000 when compared to the average loan across the scheme in totality of £201,333. 

Commenting on the Freedom of Information request, Purbeck Personal Guarantee Insurance’s managing director Todd Davison said: “The ease with which business owners and directors were able to secure bounce back loans, with six years to pay off the debt, no personal guarantees and no fees may have come back to bite the UK government which is now facing the prospect of close to £5.5bn lost to the scheme in arrears, fees and interest. 

“In contrast, accessing CBILS was more restrictive with lenders permitted to request personal guarantees on loans of £250,000 and over. There is little doubt that personal guarantees will remain a core feature of any future loan scheme for small businesses from the UK government.”