Funding Options has called on the government to allow more agile lenders and B2B marketplaces to support UK independent businesses during the Covid-19 pandemic.
The government’s £330 billion coronavirus business interruption loan scheme (CBILS), which provides SMEs experiencing revenue loss and cash flow disruption with access to loans, is currently limited to around 40 ‘accredited lenders’.
According to the latest figures, just 1,000 businesses, out of six million British SMEs, have been granted loans up to £145million as a part of the CBILS.
Yet Funding Options, the UK-based business finance marketplace, says it has seen huge demands from SMEs looking to borrow since the outbreak of coronavirus and is concerned that the wider fintech lending market don’t have access don’t have access to the CBILS fund.
Funding Options’ chief marketing officer, David Keene, told The Fintech Times: “More than 10,000 businesses have requested loans in March worth more than a billion pounds. That’s a huge number of businesses looking to get some kind of lending to tide them through the current climate.”
“All of the big banks with all of their resources have only managed to lend £145million and are lending to the businesses that don’t need lending. Meanwhile, the genuine businesses that need lending are being blocked out because they’ve been hit by Coronavirus.”
“The scheme is supposed to be focused on how we help businesses impacted by Covid-19, but it is just not functioning properly right now. The market for lending is frozen and the idea of marketplaces have literally been put into the deep freeze. Small businesses are just not getting the amount of lending that they want.”
Funding Options wants the government to provide access to alternative finance providers, B2B (business-to-business] marketplaces and other fintech organisations to complement the crop of big high street banks who are agile and able to work quicker.
“The Treasury has gone straight to the highstreet banks to help small businesses despite, having this amazing resource in the UK of phenomenally strong agile fintechs, marketplaces and alternative lenders,” says Keene. “UK fintechs are able to move fast but are largely cut out of the situation right now. We should be leveraging that ecosystem.”
“That would be our call out to the government, look, let’s be agile about this and let’s preserve those businesses out there so that when the lights come back on again, they’re all alive and healthy and can start to trade again. Let’s not let them go to the wall.”
“Borrowers should be able to go and have a look at what lenders are on the market and what’s available out there. Similar to how private healthcare has stepped in to help the NHS, the private sector fintechs should be allowed to help those businesses that are critically ill right now.”
In an open letter to the Treasury,Funding Options has called for it to ‘disseminate funds faster, develop better solutions faster and use Open Banking technology to enable the fast, secure and accurate processing of loans’.