Originally written by Timothy Adler on Small Business
Fintechs are giving up on ever being recruited to join the government’s emergency coronavirus bailout scheme for small businesses, despite being eager to do so.
The British Business Bank, which administers the Coronavirus Business Interruption Scheme (CBILS), has added four more lenders to the scheme – Allied Irish Bank, ThinCats, Paragon Bank and IGF – to join 48 existing accredited lenders.
However, just three of those which have joined the coronavirus loan scheme – Funding Circle, OakNorth and Starling Bank – are the kind of fintechs which have shaken up business lending.
British Business Bank says that 80 per cent of Britain’s small business have a relationship with one of the CBILS 52 accredited lenders, and that it is speeding up onboarding of new lenders to further extend the scheme’s reach.
>See also: What is the British Business Bank? – a Growth Business guide
But, according to the Telegraph, 100 other lenders are champing at the bit to join the BBB’s accreditation process and some are losing hope.
This is despite 60 per cent of small businesses saying they will run out of cash within 12 weeks, according to the Association of Accounting Practitioners.
Oliver Prill, chief executive of fintech
Tag Archive for Coronavirus Business Interruption Loan
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Microbusiness £50,000 Bounce Back Loans – how they work
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The government has launched its microbusiness Bounce Back Loans scheme with a higher than expected £50,000 limit and a 100 per cent guarantee.
Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days
Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form
The microbusiness Bounce Back Loans scheme is capped at 25 per cent of turnover and promises a streamlined application process.
Treasury says that the new microbusiness loan scheme will open next Monday, May 4 and will deliver cash to successful applicants within 24 hours.
Rishi Sunak, the chancellor, said: “Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.”
Mike Cherry, national chairman of the Federation of Small Businesses, said: “To date, the existing interruption loan scheme has not been working for the small firms that make-up 99% of our business community.
“The decision by the chancellor to listen to our recommendation for a 100 per cent guarantee on smaller loans, alongside the
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Support for tourism, hospitality needs to be extended, says Ed Milliband
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Economic support for those small business sectors hit hardest by coronavirus needs to be extended once Britain emerges from lockdown, says Ed Milliband.
The shadow business secretary said that travel, tourism and hospitality will need extended help from Treasury even as the rest of the country opens up again.
Milliband, speaking in a Zoom conference call hosted by accountancy software firm Intuit, said: “Economic support must match the lockdown exit strategy. The support needs to go on for longer if lockdown goes on for longer. If you lift lockdown too early, the implications for the economy and for the country would be disastrous.”
See also: Small business minister trying to help owner-directors hit by coronavirus
Shadow chancellor Annelise Dodds, speaking on the same call, echoed Milliband, saying that those small businesses in the travel, tourism and hospitality sectors could face disruption “for years”, and that there needs to be an ongoing system in place to support them.
Ed Milliband also voiced support for the furlough scheme to be softened so that small business employees could do some work even while furloughed, while the country drifts back to work.
‘Small businesses are in the frontline of this crisis’
Many small businesses
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Rishi Sunak eyes offering 100% guaranteed loans for microbusinesses
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak is preparing to offer 100% guaranteed loans of up to £25,000 to Britain’s microbusinesses.
Bank of England governor Andrew Bailey, three ex-Conservative chancellors and Tory MPs have put the chancellor under sustained pressure to amend the coronavirus business interruption loan scheme (CBILS) for a third time.
On Monday, the chancellor said he was “not persuaded” to increase guarantees for small businesses borrowing up to £5m through the scheme.
This is despite just 16,600 loans being approved so far out of 36,000 applications. This out of a potential market of 5.9m small businesses.
>See also: Coronavirus emergency business loans may be changed yet again
Would-be borrowers say they can either never get through to their bank or the bank rejects them as being too risky. The Catch-22 here is that banks are only lending to businesses it deems would have been viable before the coronavirus pandemic.
A recent survey by payment processor Tide showed small businesses expect revenue is set to decline by 57 per cent by the end of April. Over one in three small businesses (36 per cent) expect their year-on-year income to plummet by more than 90 per cent this month.
According to the Financial
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Rishi Sunak rejects 100 per cent guarantee for business interruption loans
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak has poured cold water on calls for the Treasury to provide a 100 per cent guarantee for coronavirus business interruption loans.
The government is currently underwriting 80 per cent of loans to small businesses that are struggling for survival.
However, there have been a chorus of voices – including three former Conservative chancellors – calling for that guarantee to be lifted to 100 per cent, as is the case in Switzerland.
>See also: How do I apply for a Coronavirus Business Interruption Loan?
Speaking at the Downing Street press conference, Mr Sunak said he was “not persuaded” that a total state guarantee was the right thing to do, despite pleas from small businesses being rejected through the Coronavirus Business Interruption Loan Scheme (CBILS).
Mr Sunak argued that when the plethora of government coronavirus emergency business funding was looked at in total, with grants for small businesses, as well has the furlough scheme which launched yesterday, the British help package was generous.
More significant
Speaking at yesterday’s Downing Street press conference, Mr Sunak said: “Some people have made comparison with what’s going on in other countries. When you look at the totality, what we’re doing is more significant
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Ebury launches £40m small business coronavirus lending package
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Ebury, one of the largest fintech companies in Europe, has launched a £40m funding package for UK and European small businesses.
The Santander-backed firm has raised the initial £40m help SMEs manage their working capital during the coronavirus crisis. Ebury is hoping to expand this programme into the hundreds of millions in collaboration with governments in the UK and Europe.
This initiative is geared towards SMEs who cannot access the government’s controversial Coronavirus Business Interruption Loan Scheme (CBILS).
>See also: How do I apply for a Coronavirus Business Interruption Loan?
At the moment the firm is approaching government bodies so that it can distribute financial packages in the coming months. The firm is in talks with the British Business Bank to become an accredited CBILS lender, according to Sky News.
Juan Lobato, co-founder of Ebury, said: “Getting finance to UK companies is essential in helping manage the cash flow pressures they are currently experiencing and Ebury is delighted to be offering this financing initiative. Ebury was founded to fill a gap left by the 2008 financial crisis and in this latest crisis it is ideally placed to help the government’s distribution of its financial aid packages to large
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Coronavirus emergency business loans may be changed yet again
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
UPDATED: Chancellor Rishi Sunak may change coronavirus emergency business loans yet again in the face of mounting evidence they aren’t working.
Yesterday, SmallBusiness.co.uk revealed that the majority of small businesses are having their loan applications turned down, even since the chancellor loosened the scheme on April 3.
Today, the British Chambers of Commerce announced that only 2 per cent of businesses surveyed had had their loan applications approved.
>See also: Fewer than 10% of businesses can access government coronavirus funding
On Tuesday evening, Rishi Sunak told the Financial Times that he would look at other countries to see if the government “could learn and improve” on the small business bailout scheme, which provides interest-free loans of up to £5m for up to one year before bank interest rate kicks in.
Switzerland, on the other hand, offers up to £400,000 as an interest-free loan repayable over five years. The Swiss government covers the entire amount. And cash can be accessed within 24 hours, not weeks, as in the case in Britain.
100-per-cent guarantees
George Osborne, the former Conservative chancellor and editor of the Evening Standard in London, told the BBC on Tuesday that the government should follow suit for the smallest
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Most emergency coronavirus bank loan applications still being rejected
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
EXCLUSIVE: Most coronavirus emergency business loan applications are still being rejected, despite chancellor Rishi Sunak overhauling the scheme.
Fifty-three per cent of Coronavirus Business Interruption Loan Scheme (CBILS) loan applications have been rejected, according to a survey of Small Business readers – despite the Treasury loosening the scheme on April 3.
Previously, high-street banks were following government guidance that coronavirus emergency business loans should only be offered to small businesses which would not qualify for a commercial loan.
The paradox is that banks were being asked to lend to companies they would normally turn down – and still be on the hook for the 20 per cent of the CBIL the government has not guaranteed.
Banks have long been reluctant to lend to small businesses, with just 2 per cent of lending going to SMEs, as they do not have the security banks look for.
Small Business surveyed 1,823 small businesses, 53 per cent of which said their coronavirus loan application had been rejected since April 3, when the scheme was overhauled.
The SmallBusiness.co.uk survey chimes with business secretary Alok Sharma’s own admission on Sunday that only 4,200 loans worth £800m have been awarded, despite over 300,000 applications.
This is
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First two fintechs added to coronavirus emergency loan scheme
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The first two fintech banks have been added to the government’s coronavirus emergency business interruption loan scheme in an effort to break the logjam.
Other fintechs, including Funding Circle, Iwoca and Market Finance, which together have provided loans worth billions of pounds to small businesses, are also hoping to get approval to join the emergency loan scheme next week.
Only 2,500 loans worth £450m, have been agreed so far through the Coronavirus Business Interruption Loan Scheme (CBILS) out of a small business population of 5.9m.
Bankers say they have been overwhelmed with applications through the CBILS, with an estimated 300,000 enquiries.
Plus they complain that their loan book must be scrutinised by the British Business Bank, which itself is overwhelmed by the volume of loan applications.
>See also: 12 of the best digital banking platforms for small business
Yesterday, former Treasury secretary Baroness Morgan called for the CBILS to be opened up to fintechs, which, she said were more agile and more nimble than traditional lenders.
OakNorth Bank and Starling Bank have been added to the dozens of existing accredited lenders, alongside Cynergy Bank and The Co-Operative Bank.
Meanwhile, Arkle Finance, Close Brothers and Secure Trust Bank have also become accredited CBILS
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Less than 10% of businesses can access government coronavirus funding
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
New figures show that most small businesses can’t access the government’s emergency coronavirus funding despite wanting to take advantage of it.
One set of statistics from UK Finance reveals that just 2,022 loans have been made to UK SMEs through the government’s Coronavirus Business Interruption Loan Scheme (CBILS), with less than 1pc of enquiries resulting in these loans.
Meanwhile, the Corona Business Impact Tracker from the British Chamber of Commerce (BCC) measures the impact of coronavirus on businesses as well as the effectiveness of the government’s emergency actions. The latest polling took place from 1-3 April and received 1000 responses.
The tracker shows that awareness of the schemes is high: 59pc knew about the CBILS and 19pc planned to use it. Fewer business owners (42pc) knew about the grants available to small businesses and 24pc planned to use it.
Polling numbers say that 8pc of respondents were unsuccessful in getting access to the CBILS. They cite that the application process was slow and that they couldn’t get responses from the relevant body. The BCC is optimistic that successful applications will increase in the coming weeks.
As for the grant schemes, 7pc of respondents were using them at the