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Three schemes that channeled £78billion into businesses across the UK during the coronavirus pandemic could have saved millions of jobs, a report has found.

The researchers said between 500,000 and 2.9 million jobs could have been lost without the loans.

The research was commissioned and paid for by the British Business Bank, which oversaw the three loan schemes on behalf of the government

He estimated that between 146,000 and 505,000 businesses that took Bounce Back loans could have gone bankrupt without the support. This represents up to a third of the total number of companies participating in the program.

Between 5,000 and 21,000 other businesses that took out loans under the Coronavirus Business Interruption Loan Scheme (CBILS) and its sister program for large businesses, CLBILS, may also have gone bankrupt, according to the report.

“The Covid-19 emergency loan schemes were designed to cope with a radically changed economic landscape for small businesses as the closures came into effect,” said British Business Bank boss Catherine Lewis La Torre.

“This assessment is the first indication of the importance of these programs in saving livelihoods, businesses and hundreds of thousands of jobs, and we are proud to have played a vital role in making them happen.”

In the early days of the pandemic, only the CBILS and CLBILS programs were launched by the Government.

But their size and the hurdles companies had to jump through proved too restrictive for many companies, ministers later argued.

This eventually led to the Bounce Back Loan Scheme, launched in early May 2020.

Within a week, 270,000 loans had been repaid. A month after its launch, 800,000 businesses had taken out loans.

Many loans were in the accounts within 24 hours because the banks had to do nothing more than the most basic checks on who they were lending to.

Lenders were to follow their usual procedure when paying CBILS and CLBILS, but not for BBLs.

This has made many officials and watchdogs, including MPs on the Public Accounts Committee, worried about the number of companies that may have borrowed fraudulently.

Although the banks have to chase the money away if the companies don’t pay back, ultimately the taxpayer will pay the banks back if they can’t get all the money back.

One estimate is that around 7.5% of loans may never be recovered due to fraud.

The assessment of the three loan schemes, released on Tuesday, did not look at fraud. The researchers said others had already looked at the area and it was too early to be certain.

The review found that the loans were widely used to finance borrowers’ operations or to increase their reserves.

Federation of Small Business national chairman Martin McTague said: “Emergency loans were among the most important lifelines, and the British Business Bank worked collaboratively and effectively with us to ensure that there was a guaranteed financing option for even the smallest businesses.

“As today’s findings demonstrate, this swift action has prevented large numbers of businesses from going out of business, protecting jobs, livelihoods and allowing these businesses to participate in the economic recovery.”

Chris Wilford from the Confederation of British Industry said: “The Covid loan schemes have made a critical difference to businesses of all sizes in all regions and nations of the UK.

“Without this vital lifeline, hundreds of thousands of otherwise viable businesses, jobs and livelihoods would have been lost.”