THE UK Government has come under fire after new figures showed less than a quarter of firms which have formally applied to it for loans to help them through the coronavirus crisis have secured cash support.

Both Labour and the SNP claimed the system was not working well and was too slow as they called for urgent action to speed up payments to struggling businesses.

The latest figures show that more than £1.1 billion has now been handed to firms through the Government’s Coronavirus Business Interruption Loan Scheme in the three weeks since it started.

UK Finance, which represents banks and the finance industry, pointed out lending through the scheme had grown by £700 million over the past week; an increase of around 150 per cent.

It said 6,020 loans have now been provided to businesses through the programme.

The pace of loan approvals has increased in recent days, rising from 240 loans on April 2 to 910 on April 8, with a further 1,800 loans worth more than £300m recorded over the bank holiday weekend.

It comes after calls from business groups, such as the British Chamber of Commerce, for the loan scheme to be accelerated to ensure small and medium-sized businesses can stay afloat.

UK Finance said lenders had received 28,460 formal applications from businesses, meaning that fewer than one in four applications have currently been approved. However, it is understood that around 300,000 businesses have made inquiries regarding the loan scheme.

The banking body stressed that other applications were still being processed and were "expected to be approved over the coming days".

It explained lower staffing levels at banks and other lenders meant they had come under significant pressure from increased demand for support from business customers.

Stephen Jones, UK Finance Chief Executive, said: "Frontline staff in local branches and call centres are working incredibly hard to help firms access finance as quickly as possible amid unprecedented demand.

"Like all businesses they are working at reduced capacity as many staff are self-isolating or looking after family."

Rishi Sunak commented: "Getting finance to businesses is a key part of our plan to support jobs and the economy during this crisis and we're working with lenders to ensure support reaches those in need as soon as physically possible.

"Loan approvals have doubled in a week with more than 6,000 businesses benefiting from over £1.1bn of loans and it's vital we continue this upward trajectory," added the Chancellor.

But Labour’s Ed Miliband insisted the Government loan scheme was “simply not working well enough,” pointing out how more than 70,000 Swiss businesses received £12bn in loans in just one week.

“We need change now,” declared the Shadow Business Secretary. “The Chancellor must move to a 100 per cent guarantee of loans for smaller businesses as other countries have done. In this economic emergency, it is the right thing to do.”

He went on: “In the coming days, businesses are facing critical decisions about their future.

"Ministers must also accelerate the approval of new financial providers, do more to simplify the application process and provide support for good, future growth businesses not currently in profit. There also needs to be a loans scheme for larger businesses with turnover over £500m.

"The OBR's grim scenario for our economy shows why we must do everything we possibly can now to protect jobs and businesses," he added.

Drew Hendry for the SNP said: "The UK Government needs to provide the urgent support that businesses need during the coronavirus crisis. The roll-out of the emergency loan scheme is far too slow and too many businesses are not getting the cash they require to stay afloat.

"In other European countries support for business has been rolled out far quicker. After weeks of waiting, it is time for the Chancellor to step up and provide more direct support, speeding up the process and providing more grants not just loans.”

The party’s business spokesman said it had welcomed the announcement of the emergency loan scheme as an important first step back in March but it was now clear it was not working in practice and the urgent cash injection that the business community had called for had still not been delivered.

"The 6,020 businesses that have received support are a tiny fraction of the millions of small and medium businesses in the UK,” declared Mr Hendry. “Many businesses aren't getting the urgent cash they need to pay the bills and could go to the wall unless support comes quickly.

He added: "The SNP will continue to press the UK Government to ensure businesses to get the support they need during this unprecedented emergency - but it is clear that we need to see much more support delivered without further delay."