Firms sitting on Covid loans

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Businesses sitting on half of coronavirus loansAs much as £21bn of taxpayer-backed coronavirus loan cash is sitting unused in firms' bank accounts, bankers have revealed, with senior executives telling MPs that around half of the £42bn handed out under the Government's Bounce Back Loan scheme for small companies is being held onto. Paul Thwaite, commercial banking chief at NatWest, told the Treasury Select Committee: “I think that demonstrates ... that some customers have exercised caution, drawn down on the lending and kept it for future spending.” Amanda Murphy, HSBC’s head of commercial banking, said that for many SMEs, “these loans provided a very important lifeline, enabled them to pay their bills… and prevented them from going into financial difficulty.” Suggesting that further support will be needed when loan applications close in January, Starling Bank CEO Anne Boden said: “The pandemic doesn't end when these schemes finish.”

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