Small businesses have rushed to apply for a new government-backed loan scheme, prompting one lender to warn that banks may struggle to cope with the demand. The bounce-back loan scheme (BBLS) was launched at 8.30am on Monday and had received 79,500 applications by the afternoon, already exceeding the 52,807 applications for the existing coronavirus business interruption loan scheme (CBILS), which started on 23 March. According to the latest available figures, Lloyds had received 17,000 BBLS applications by midday, Royal Bank of Scotland 22,000 by 2.30pm, and HSBC 34,500 by 4pm. Barclays was the only lender to confirm the number of approvals it had made for the 100% government-backed loans, totalling 6,000 and worth £200m, by mid-afternoon. The fast-track scheme offers loans worth up to £50,000 to Britain’s smallest businesses, which can apply through a simple online form. All banks offer the loans at an interest rate of 2.5% that kicks in after the first 12-month period, which is interest- and payment-free. Anne Boden, the chief executive of the digital lender Starling bank, which has applied to be a BBLS lender, told MPs on the Treasury select committee that there would be some concerns about how quickly banks could ramp up their lending to cope with demand. The CBILS has been criticised for slow processing of applications. Under that scheme, lenders have to send data manually to the British Business Bank – the state-backed institution managing the scheme – to process the government-back loans. Boden said this method was “not sustainable”. The British Business Bank is now working on a new digital platform to speed up the process, but that will not be ready for another six to seven weeks. “My greater concern at the moment is that the processes within all the banks won’t take the strain of what’s happening to process all these loans and bounce back that quickly,” said Boden. “I think there’s going to be a scale problem here.” Starling only started CBILS lending on Monday, despite having applied weeks ago to be included. Accredited BBLS lenders told the committee there had been a deluge of claims on Monday morning. “We’ve seen applications at a rate of about 35 per minute,” Matt Hammerstein, the head of Barclays UK bank, said. “So I think there will be extraordinary demand, recognising the severity and the breadth of the impact of this [Covid-19] crisis across smaller businesses.” RBS’s commercial banking chief, Paul Thwaite, said staff had worked incredibly hard to get the scheme up and running on Monday morning and that the number of call centre staff had been doubled to more than 500 to deal with demand. But MPs asked whether bank systems would be able to cope with the surge in demand, including those linked to the British Business Bank. Barclays customers were reported to be struggling to access applications on the bank’s website. Hammerstein denied that the site was failing to cope, and said the bank’s technical team was increasing the number of applications the online site could handle at any one time. UK lenders have been accused of failing to distribute funds fast enough through existing government schemes. The latest figures showed that they approved less than 50% of the 52,807 CBILS applications. David Oldfield, the head of commercial banking at Lloyds Banking Group, told MPs that his team also struggled to deal with the loan processing systems linked to the British Business Bank. Those systems were originally built for another government programme known as the Enterprise Finance Guarantee, which was not designed to handle such a surge in demand. The committee chair, the Conservative MP Mel Stride, warned that he would be drawing attention to banks that were “slow off the mark”.