Chancellor Rishi Sunak told the House of Commons the scheme would start next week, offering firms loans up to £50,000 within days of applying. Small firms are to get access to 100% taxpayer-backed loans after concerns where raised about slow access to existing coronavirus rescue schemes.
more details need to follow on how firms will access this new loan.
Oliver Prill, Tide CEO said: “Small businesses have been disproportionately impacted by this crisis. As a business banking platform providing services to 1 in 40 UK SMEs, we welcome the introduction of the new Bounceback Loans. The only way to make sure vital cash gets to SMEs is with a 100% guarantee on loans of up to £50,000.
“However, we are extremely concerned that this scheme will encounter the same issues as the CBILS, particularly a lack of reach. We implore the Treasury and British Business Bank to allow Fintechs like Tide to deliver this funding as quickly as possible. We are ideally placed to distribute funds to small businesses and want to get started as soon as possible. By offering the scheme only via traditional bank lenders, a fifth of small businesses will not get easy access. Tide has already been contacted by small businesses asking if they can access Bouncebank Loans via our platform, and we are desperate to provide this vital support to our members.”
Simon Cureton, CEO of Funding Options said: “The government’s decision to introduce 100% government-backed loans for independent UK businesses from next week is, on the face of it, a very positive development that has all the ingredients to deliver vital funds to those that need them the most quickly. In contrast to the Coronavirus Business Interruption Loan Scheme (CBILS), there is less risk for the lenders, less complex eligibility criteria without the subjectivity element, a simple form for business owners to fill in online and rapid delivery of loan funds within 24 hours of approval. Whilst very supportive of this development, it is critical the Bounce Back Loans scheme is administered & delivered as intended, in the timeframes envisaged and at scale, which didn’t happen with CBILS. The Alternative Lenders are ideally set up to distribute Bounce Back Loans through the scheme and yet it would appear they may be excluded from participation based on accreditation. It would be great to see HMG/HMT embrace the full ecosystem of lenders in the SME sector to maximise the speed of distribution and we await further details in the coming days. The clear priority for all participants in this sector, of course, is that independent UK businesses receive critical financial support and in that context, yesterday’s announcement is an excellent step forward.”
We will discuss this and other areas in our rescheduled webinar “Can FinTechs save the UK Economy – PART3” Register here