Last checked at 
(Adds UK Finance comments to parliament)
By David Milliken and William Schomberg
LONDON, April 15 (Reuters) - British banks are dealing with
a backlog of more than 20,000 applications for government-backed
emergency finance for small businesses, three weeks after the
scheme was launched to help reduce the economic impact of the
coronavirus outbreak.
UK Finance, a trade body that represents major lenders, said
its members had lent 1.115 billion pounds ($1.39 billion) as of
April 13, up from 453 million pounds a week earlier.
But since the scheme, many businesses have complained that
it has been slow to provide funds.
A survey from the British Chambers of Commerce on Wednesday
showed that only 2% of small businesses said they had received
money from the scheme - the first part of 330 billion pounds of
state lending - while 9% had been rejected or were still waiting
for a reply.
UK Finance said its members had worked over the Easter
holiday weekend and approved 6,020 loans in total as they work
through the 28,460 applications which they have received so far.
"Like all businesses, they are working at reduced capacity
as many staff are self-isolating or looking after family," said
Stephen Jones, the chief executive of UK Finance.
The Coronavirus Business Interruption Loan Scheme (CBILS)
gives loans of up to 5 million pounds to companies with a
turnover of up to 45 million pounds. The government guarantees
80% of the loan, but banks will be on the hook for the remaining
20% if borrowers default.
Finance Minister Rishi Sunak has rejected calls from some
business groups and politicians for the government to shoulder
100% of the losses to speed the lending process.
"We're working with lenders to ensure support reaches those
in need as soon as physically possible," he said on Wednesday.
UK Finance said the average size of the loans made was
185,000 pounds.
The Federation of Small Businesses (FSB) said the process
was still too daunting for the smallest businesses and a
fast-track process for loans of less than 30,000 pounds needs to
work better.
"Many members tell us it's difficult to get to the formal
application stage - banks are still slow to respond to CBILS
enquiries," said FSB Chairman Mike Cherry.
UK Finance chief Jones told lawmakers that Britain's
government should consider fully guaranteeing small emergency
business loans to speed up processing, rather than requiring
banks to take on some of the risk and conduct time-consuming
credit checks.
The biggest backlog was for loans of less than 25,000 pounds
and issuing these would be faster if the government did not
require banks to take on 20% of the risk, he said.
However, doing so would raise the risk of public money going
to businesses that were not going concerns even without the
coronavirus, Jones warned.
($1 = 0.7997 pounds)
(Editing by David Evans and David Goodman)
