LENDING THE FINTECH TIMES
What did fintechs think of CBILS? The Coronavirus Business Interruption Loan Scheme (CBILS) has seen lenders give £22billion to more than 90,000 businesses during the Covid-19 pandemic but will be replaced in April by the government’s new Recovery Loan Scheme. While initially criticised for the slow pace at which banks processed loans to pandemic-hit companies, The Fintech Times hears from accredited fintechs who believe the scheme has been a crucial lifeline for bloodied UK businesses
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BILS – one of several state-backed packages – launched in March 2020 and saw the government guaranteeing 80 per cent of loans up to £5million to SMEs with a turnover of up to £45million. British Business Bank has operated the demand-led scheme, which closes applications on 31 March 2021, via its more than 100 accredited lenders. But, from 6 April 2021, the government’s new Recovery Loan Scheme comes into play, providing lenders with a guarantee of 80 per cent on eligible loans between £25,000 and £10million.
HOW MUCH HAVE FINTECHS LENT THROUGH CBILS?
Businesses across the UK have to date benefited from 92,449 loans worth £22billion through CBILS, in addition 18
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to 705 loans worth £5.3billion through the Coronavirus Large Business Interruption Loan Scheme (CLBILS). OakNorth Bank said it has approved just over £590million through CBILS and its sister scheme CLBILS, around a third of its total lending over the period. Peer-to-peer lender Funding Circle had approved £1.85billion as of 15 November last year while small business finance provider Iwoca said it was on track to provide £300million when CBILS applications end. Nucleus Commercial Finance has lent over £150million to date and aims to lend £200million by the end of March while
Market Finance said it expects to have lent between £200million and £250million when CBILS ends. Atom Bank has lent £340million across 506 applications while ThinCats said it expects to have lent around £250million through CBILS by the time it closes, around 75 per cent of this supporting new borrowers. Ultimate Finance, meanwhile, said it had hitherto lent around £35million and expects to lend between £60million and £65million by the end of March.
HAS CBILS BEEN A SUCCESS?
Of the fintechs we spoke to, the overall
consensus is that CBILS was handled well by the British Business Bank in difficult circumstances and has proved an important lifeline for businesses. Paul Elliott, head of business banking, Atom Bank, said: “Without governmentbacked guarantees we would have seen the drawbridges of lenders come up and wait for the storms to pass. “Unfortunately, this would have resulted in an exponential business failure rate that would have dwarfed the figures we are seeing now and an incredibly swift and high unemployment rate.” Yet CBILS has had its critics: from fintechs believing they were unfairly
