It has been over four months since the UK government initiated lockdown restrictions in response to the health emergency caused by the Covid-19 pandemic. While it was vital to halt the spread of the virus, the situation also required an unprecedented package of support to the economy to minimise business failures, job losses and long-term scarring of the economy. The banking and finance industry put in place a clear plan to help businesses get through this crisis, working with HM Treasury (HMT) to introduce a number of government-backed lending schemes.

Weekly reports from HMT have illustrated how important schemes such as the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Bank Loan Scheme (BBLS) have been in providing cashflow support to businesses. Demand for loans quickly ramped up following their introduction and the latest figures indicate that nearly 1.2 million CBILS and BBLS facilities with a value of over £47 billion had been approved by the beginning of August.

These are some fairly big numbers, certainly relative to ?normal? times, which show the unprecedented level of support provided by lenders to businesses. While it's important to understand how the aggregate picture is evolving, new data from the British Business Bank (BBB) also casts light on how this support has been distributed across regions and sectors. This will help policymakers and finance providers to assess where future areas of risk and opportunity may lie.

Finance demand met across UK regions

The new BBB data shows how approved CBILS and BBLS facilities have been dispersed around UK regions and devolved nations. While in value terms, the main destinations for CBILS and BBLS approved lending have been London, the South East and the North West, this largely reflects the distribution of businesses around the UK. For example, while facilities offered in London accounted for 20 per cent of the total, this is in line with the city's share of the total business population (19 per cent).

CBILS and BBLS facilities offered per 1000 businesses

Source: UK Finance analysis

Our own analysis took a look at the number of facilities offered per thousand businesses in each devolved nation. And the chart above illustrates that the flow of finance to businesses across the UK has been distributed on a relatively even basis, reflecting the degree of challenge experienced by all parts of the country responding to the requirements of the economic lockdown and the widespread drop in consumer and business demand.

Moreover, the balance of facilities approved across the two schemes has also varied relatively little across the country, with around 4-5 per cent of the number of loans offered through the Coronavirus Business Interruption Loan Scheme, but the bulk of approvals recorded as the more rapidly accessible Bounce Back Loans.

All regions hit by economic impact of Covid-19

One of the main factors behind this even regional distribution of support is the widespread nature of the hit to the economy from the health crisis and the policy decisions that followed. The regular Business Impact of Coronavirus Survey from ONS tracks the turnover impact on business and how this has played out across the country. The chart below shows the balance of companies reporting a negative trend in turnover as a result of Covid-19 in the preceding two weeks (that is the percentage reporting any increase in turnover minus the percentage reporting a decrease). We can see, therefore, that the impact of the pandemic and ensuing recession has been far-reaching across the UK.

A net balance of businesses report declining turnover in all regions and devolved nations

Source: ONS BICS

The new data from the BBB shows, therefore, that lending has not been concentrated to a limited number of regions and devolved nations, rather finance providers appear to have effectively distributed support to where it was needed across the UK. While, inevitably, not every business that had a need for finance will have been satisfied, the industry will continue to work with central government and local partners to engage as widely as possible with viable businesses that continue to require support as they look towards managing through the recovery. The broad national spread of the finance industry itself will continue to be an asset in this respect. Whether they are a sole trader or a company with hundreds of employees, the banking and finance industry stands ready to offer the right support to suit their customers? needs.