Evaluation of the COVID-19 Loan Guarentee Schemes

In mid-March 2020, the potential scale of the Covid-19 pandemic became clearer as public health measures designed to combat the pandemic and behaviour change among the UK population were having a noticeable impact on businesses.

Given the wide-ranging business impacts already felt and the considerable uncertainty over the financial challenges ahead, the UK government moved quickly to design and launch a series of three loan guarantee schemes (hereafter referred to as the Covid-19 Loan Guarantee Schemes or the schemes (unless stated otherwise)) targeted at businesses of different sizes, namely, the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS).

In March 2021, the British Business Bank (BBB) commissioned London Economics and Ipsos to undertake a multi-year evaluation of the three Covid-19 Loan Guarantee Schemes. This evaluation aims to assess whether the objectives of the Covid-19 Loan Guarantee Schemes were satisfied. Key research questions are divided into process, impact, and economic questions.

• The process evaluation focuses on scheme design, scheme delivery, debt recovery processes, and variations in processes.
• The impact evaluation focuses on the extent to which the Covid-19 Loan Guarantee Schemes affected business outcomes – for instance, whether having received funds under the Covid-19 Loan Guarantee Schemes was associated with a higher likelihood of business survival, or greater turnover or employment.
• The economic evaluation focuses on the value for money of the Covid-19 Loan Guarantee Schemes, taking into account both its costs and benefits.