What does fintech mean to you? For Countingup’s CEO, Tim Fouracre, “Fintech to me is simply innovation in finance. Innovation is about looking at things differently, or in a new way”. For the six million small and medium businesses (SMEs) in the UK today, fintech could mean something more. It could be that helping hand, in a desperate situation.
As the economic impacts of the COVID-19 pandemic take hold, our incredible tech and fintech sector is standing up for vulnerable businesses, in the most diverse ways imaginable. From government lobbying to facilitating cashflow, our industry is taking on a whole new meaning for stranded businesses today.
Keeping our businesses in business
According to the Office of National Statistics, 77% of businesses are managing to continue, but working around the lockdown is no easy task. Particularly hard hit are food services, art and entertainment, where only 20% can still trade. Finding ways to adapt is stressful. It’s even tougher for business owners who need to self-isolate or may feel digitally challenged.
Recognising this problem, 11:FS’ co-founder, Jason Bates, posted this appeal on Twitter, “We’ve got three weeks to save a million small businesses – pubs, restaurants, hairdressers and cafes. They don’t have cash flow, they need to sell prepayment for future services. A simple voucher platform. A volunteer team are building it this week”.
With record speed, SaveMyLocal.org was born. Since launching, more than 40 businesses are now using the pre-paid voucher scheme to stay afloat. Setting up a page is stunningly simple and volunteers such as Senior Digital Product Manager, Jack Maddock are on hand to help.
Maddock comments, “I think it’s so important that we help SMEs where possible. These business owners are having to deal with so much at the moment so if we can allow them to bring in income and take some of that stress off – why wouldn’t we? Wouldn’t it be a shame to come out of this and think oh I could’ve helped that business that went bust?”.
This touching attitude has been reflected across the tech community, with swathes of leaders harnessing their tech muscles to help prop up struggling SMEs.
Free guidance, business support and funding
Over in Wales, prominent tech leaders are closely collaborating with local government to provide free advice to businesses. Offering support are some of the country’s most esteemed entrepreneurs – including those behind Admiral, Airbus, Amplyfi, Awen, DevOpsGroup, Thales, Tramshed Tech, and Wolfberry. The calibre of expertise donated by is unprecedented.
Known as the CV-19 Tech Taskforce for Wales, the group was launched by Director of Tramshed Tech, Mark John. John comments, “We’re here to mitigate the impact of this dreadful disease upon our financial health and the long-term health of the Welsh economy.”
Despite its population of just 3 million, a staggering 50,000 people are employed in the Welsh tech sector. Leaving them jobless would be devastating for the country. Entrepreneurs like John have their eyes fixed firmly on the future, and not just the lockdown. “With the help of business and banking stakeholders as well as public sector support agencies, we’ve been assisting the dialogue with Welsh and UK Government to help shape both short-term and longer term measures to see our industry through this crisis”, says John. “To witness such a range of partners all pulling together to help each other in these desperate times through the joint Taskforce has been an uplifting experience – now and for the future”.
Way back in 1597, Sir Francis Bacon penned the phrase, “Knowledge is power”. Fast-forward 423 years to today, and tech company, Amplyfi, is using that same mantra to support SMEs. The firm is providing unlimited COVID-19 business and health data, entirely for free. CoronavirusGateway.com collates all the documents and augments them into easily digestible categories, so that business owners are armed with as much credible information as possible.
CEO of Amplyfi, Chris Ganje elaborates, “To support UK SMEs, we’ve created an open source Covid-19 dashboard, which presents analysis of UK related news alongside pertinent datasets linked to the health of the UK economy, such as exchange rates and stock market data”.
It’s a unique approach, and undeniably a helpful one for confused or struggling SMEs looking to make the best decisions.
Ganje comments, “A key mission for AMPLYFI is to empower organisations with easy access to all gold-standard sources from around the world”. To further help SMEs gain clarity, Amplyfi also scans the web for “fake news” and helpfully indicates on their portal what’s not deemed credible.
Fighting to provide loans
Around 270,000 Bounce Back Loans (BBLS) have been approved for SMEs, but it’s not nearly enough to help struggling SMEs. Research in April shows a meagre 2% of successful applicants had actually received any money from CBILS (Coronavirus Business Interruption Scheme).
As banks struggle with the back-breaking demand, fintechs are leaping up and trying to help, with varying success. Founder of several multi-billion fintech firms, Nick Ogden has been lobbying government to allow alternative lenders to also offer government-backed loans. “Across the UK, we need to leverage all of our banking and fintech assets to help these struggling businesses get the liquidity they need”, says Ogden. “Challenger banks play a critical role in the UK economy”. However, despite his extraordinary influence and following, his demands seem to be (at the time of writing) falling on deaf ears. “There’s an apparent lack of awareness of the fintech market space […] We have a whole raft of companies who are not included on the scheme, such as Monzo or Tide – customers are in effect being told not to go to them”.
Other challengers, such as Tide and Starling Bank have experienced more success. After extensive lobbying, as accredited banks, they’ve recently been added to the list of those able to offer the government-backed loans. Head of Corporate Affairs for Starling, Alex Frean elaborates, “As a bank for SMEs we didn’t hesitate to get accredited for lending under the government-backed lending schemes for small and medium-sized enterprises. In our first four days of lending under the Bounce Bank Loans Scheme, we approved nearly £300 million to help business owners stay afloat”.
Starling has geared up to help SMEs access the loans and anticipates a surge in lending for both BBLS and CBILS. To keep the momentum going, they’ve also formed a strategic partnership with Funding Circle to provide £300 million of CBILS lending to small businesses on their platform. But according to Frean, it’s just the beginning, “We are not complacent. We know that demand is huge and that many more small enterprises are in desperate need of credit, and that many of them are frustrated at having to wait even a day for money, so we’re working round the clock to serve them“.
Helping small businesses navigate the loan applications
To help speed up the clogged loan systems, some fintechs have created simple application processes and calculators. Quickly figuring out exactly what support SMEs are entitled to claim and which forms are needed is crucial. Fintechs offering this thoughtful service, include a group of volunteers known as COVID Credit, as well as Ebury, Starling Bank, Revolut and Countingup. CEO of Countingup, Tim Fouracre elaborates, “Our mission at Countingup is to make it easier to run a small business. Right now, it’s incredibly hard for businesses. Of course, our main focus is reducing the admin of running a small business with our banking and accounting app, but if there are other ways that we can flexibly use our resources to make a difference then we will. That’s why we also launched an SEISS calculator on our website so sole traders can work out what grant they are eligible for and therefore plan accordingly”.
These supportive systems provide some much-needed clarity for overwhelmed SMEs, helping them to compile everything they need into easy-to-process applications.
A small light in the darkness
All of us are living in a time riddled with uncertainty, stress and anxiety. Businesses can’t even plan ahead for tomorrow, let alone next year. It’s in these moments of crisis that people’s true colours can come out, their underlying motivations and beliefs. The response of the tech and fintech movement has been breath-taking. Above is just a small snapshot of the many companies who’ve stood up to help out. Researching the work of just one tech firm is impressive but looking at the industry as a whole is awe-inspiring. So many unique skills and creative solutions have been thrown into the ring to save our SMEs. Together the industry is fighting with everything it’s got to help them survive… for free.
The journey ahead is unknown. But, at least for this writer, there is a speck of light at the end of the tunnel: the unshakeable support of fintech and friends. The skilled and impassioned problem-solvers who won’t stop lobbying government, won’t stop innovating solutions and won’t stop defending SMEs. Here’s to them, the unyielding few – who might just save a great many livelihoods.