Yesterday the Government published detailed figures on the performance of loans issued under the COVID-19 loan guarantee schemes, including Bounceback loans and CBILs (https://lnkd.in/ecimKj6w)
Overall, suspected frauds are far lower than many early estimates, with around 2% of Bounceback loans being suspected fraud. The Department for Business's estimates of fraud were originally 11% and then 7.5% (see my earlier article: https://lnkd.in/ejXdnui9).
Using this latest data, we can now focus on the performance of loans issued by asset finance funders. My figures are based on CBILS lending by 14 firms that are likely to be predominantly through asset finance. The data reported yesterday is as at 31 March 2023.
In order of number of CBILs facilities issued, they are: Novuna, JCB, Haydock, Simply, Scania, InterBay, Compass, Arkle, Shire, Conister, Kingsway, Tower, Kennet and Genesis. Many other asset finance firms are reported in the official figures as part of their parent banks, so are excluded from this quick analysis.
🔹 Total value of 6,100 CBILs facilities issued by the 14 firms: £841m
🔹 Average value per facility: £137k
🔹 Total amount paid out by Government under the risk guarantee: £9.7m
🔹 Percentage of total lending paid out by Government: 1.1%
🔹 Outstanding loan balances in arrears or default: 3.4%
🔹 Suspected fraudulent loans: £0.28m (0.03% of total lending)
🔹 Lenders reporting any suspected fraudulent loans: 2 of the 14
The amounts paid out to date at 1.1% are lower than the 1.8% for the wider scheme, and the outstanding loan balances in arrears or defaults at 3.4% are lower than the 4.9% for the wider scheme.
This is by no means a complete analysis of the role played by the asset finance industry in supporting SMEs to recover from the effects of the pandemic. The 14 firms together account for well below 10% of total industry size, based on the Asset Finance 50 ranking survey. Yet even this limited data helps to show the vital role of asset finance firms in helping many thousands of business to survive, protecting jobs and the economy.
And, to be expected, even in such difficult circumstances, it shows the value of asset security in limiting loan fraud, arrears and defaults as compared to wider business lending.