UK scraps guarantees of £1bn of Covid loans

According to figures obtained by under a Freedom of Information request from Reuters, the state-owned British Business Bank has removed state guarantees from 10,786 loans worth a combined £979m as of 11 October.  

It follows pressure from lawmakers and the National Audit Office who criticised the programmes for being too lax. The move could leave lenders on the hook for some of the borrowings that will not be repaid.  

When reached out to by Reuters, Britain’s “Big Four” – which were among the dozens of lenders that took part in the government-backed schemes – either declined to comment or were not immediately available to comment.  

A spokesperson for the UK’s business department, meanwhile, said: “In unprecedented times, we stepped up to support the country.” they added that, where necessary, it was working with lenders to remove guarantees to protect taxpayer money.

Additionally, bank lobby group UK Finance said lenders in regular discussions with the British Business Bank, with some removing loans from the guarantee at their own discretion.