RECENT news on the banking front may have left some feeling lenders have responded to the challenges posed for businesses by the coronavirus after a slow start – without easing concerns the market is failing small firms.

Trade body UK Finance hailed figures from the Treasury showing that over 972,000 businesses have been provided with lending worth a total of £40.7 billion through the three major government-backed lending schemes launched in response to the coronavirus.

The figures show small and medium sized enterprises account for the vast bulk of the firms that have raised funding.

Fifty thousand have raised £10.5bn in total through the Coronavirus Business Interruption Loan Scheme since its launch on March 23, the day Boris Johnson announced the UK lockdown.

READ MORE: Majority of firms are not applying for virus loans, Chambers survey finds 

Some 920,000 small firms have accessed around £28bn loans under the Bounce Back loan scheme that was introduced following complaints many SMEs weren’t getting the help they needed to deal with urgent cash flow challenges.

The headline figures suggest banks have responded on a massive scale and in a relatively short period. Colin Borland, director of devolved nations at the Federation of Small Businesses, said the introduction of the Bounce Back scheme had made a huge difference in terms of providing help quickly.

UK Finance also celebrated the fact a large number of lenders have shown they are ready to support firms.

The number of approved providers offering the CBILS scheme has doubled from 40 to almost 90 since March. Accredited lenders include traditional high street banks, financial technology firms and asset-based finance and invoice finance providers.

The seven accredited in Scotland range from heavyweights such as RBS and Bank of Scotland to smaller firms including DSL Finance.

READ MORE: Royal Bank profits hammered by £630m virus charge

Some 19 lenders can provide Bounce Back loans in the UK, including online players Tide and Starling Bank.

Optimists might feel the advent of CBILS and Bounce Back will encourage the emergence of more challenger banks, which could help shake up a market long dominated by a few big fish.But it will be some time before it becomes clear what kind of impact newer players have had.

Many of the firms that have been awarded CBILS or Bounce Back type lending will require long term support.

While Government guarantees will help to minimise losses for lenders, smaller players may not have the financial or operational capacity to provide loans to significant numbers of customers.

Other figures issued last week indicated challengers were struggling to loosen the grip of one giant on the market even with generous support.

Under the Incentivised Switching Scheme SMES can qualify for dowries worth up to £50,000 to move from Royal Bank of Scotland group to one of 10 qualifying lenders.

It was expected the scheme would encourage 120,000 SMEs to switch from taxpayer-owned Royal Bank by the original deadline of the end of August.

Only around 41,000 SMEs have switched or are in the process of doing so.

The scheme is due to end in June 2021.If the targets have not been met by then the UK Government and the European Union may have to debate what happens next.

The scheme was introduced under the revised arrangements agreed in 2017 to allay EU regulators’ concerns about the £45bn bailout RBS got from the UK Government amid the financial crisis of 2008.

READ MORE: 200,000 more SMEs offered dowries to switch from RBS group

It is administered by Banking Competition Remedies (BCR), which last week extended the deadline for applications to the end of February. An additional 200,000 RBS group customers became eligible for the scheme.

BCR said low switching rates may reflect the fact many firms have other priorities amid the coronavirus crisis.But switching rates have been below target since the scheme’s inception. The sizes of some of the dowries payable were increased in March.

Some may think the figures suggest the offers of challenger banks are not compelling enough to grab the attention of SMEs.

Mr Borland said more competition is still required north of the Border to break the grip of RBS and Bank of Scotland on the market. Low switching rates under the ISS scheme may reflect the fact the incentives on offer are not sufficient to persuade people to go through the hassle of changing providers.

Around 320 firms have accessed funding under the Coronavirus Large Business Interruption Loan Scheme.