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Are we on the road to recovery? BBLS, CBILS, CLBILS and the Future Fund.

Halfway through the second week of the Bounce Back Loan Scheme’s (#BBLS) existence and there is still much to talk about. The first week was plagued with reports of glitches for Barclays and an unprecedented demand was reported by NatWest / RBS in an interview with The Fintech Times. Has the situation changed?

By close of business on 10 May 2020 the British Business Bank released a figure of 268,000 BBLS loans worth £8.3 billion had been delivered. These figures have quickly overtaken the values for the Coronavirus Business Interruption Loans Scheme (CBILS) which stood at 36,000 loans worth only £6 billion.

Given these figures the average loan value for BBLS is £30,970 and £166,667 for CBILS, would we be correct to assume that the UK Government support is getting to the right SME’s now? Well if we assume that businesses are applying for the full 25% BBLS amount, then the businesses being supported are in the £125,000 turnover bracket, which would put them in the Micro and Small Business categories.

However following our conversation with Natwest their data suggested that most businesses were not applying for the full amount available, so whether the BBLS is supporting the size of business it was designed for still needs further investigation.

The second week got off to a better start with Starling, the digital bank, opening their BBLS lending. In the first day and a half, Starling had paid out £90 million in loans to business customers and made a total of £120 million in offers.

Interestingly and maybe not surprisingly the interest in this scheme has led to a sharp spike in business and sole trader account openings. Now at record levels, in one day alone, Starling opened nearly 1,900 new business accounts.

It would be interesting to know the number of accounts that had received loans, to calculate the average loan value. Are sole traders much more likely to get access to the BBLS through Starling than with high street banks and is this where the spike in account openings are coming from?

Starling, perhaps wanting to focus on delivery of loans via BBLS, have partnered with Funding Circle, the UK’s largest small business loan platform, to provide £300 million of lending to small businesses under CBILS.

In other news the British Business Bank continues to add accredited lenders to its scheme, with Capital on Tap becoming an official accredited lender of the Coronavirus Business Interruption Loan Scheme (CBILS) along with Market Finance the platform offering invoice and loan financing.

David Luck, CEO of Capital on Tap, said: “We are extremely pleased to be approved for accreditation as a lender under CBILS and help as many SMEs as we can that are in need as a result of COVID-19.
It is greatly important to us to ensure the application process and results are delivered as quickly as possible, knowing how crucial this is to the survival of small businesses. We aim to continue our fast and efficient processing of applications that we have done as a business on a day-to-day basis.’
‘We are primarily targeting those smaller businesses – from beauty salons, family-run companies, small agencies – those who have struggled the most with accessing funds so far during this pandemic. We hope that as an accredited lender, we will be able to help protect the small business economy in the UK’

Anil Stocker CEO and Co-founder at MarketFinance announced on Linkedin that he was “Very excited to share with you that we’ve been accredited by the British Business Bank to deliver the Coronavirus Business Interruption Lending Scheme to UK businesses.” Thanking the British Business Bank, Bank of England, HM Treasury and Department for Business, Energy and Industrial Strategy (BEIS) for allowing them to do their part to help. “

He also pointed out you can now register your interest in CBILS via there website here

Author

  • Editorial Director of the The Fintech Times

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