OakNorth Bank and Starling Bank are first two fintechs added to the Coronavirus Business Interruption Loan Scheme to help spread out demand
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: P2P, Lending, Digital Bonds, BNPL, Private Credit
The Intersection of Small Business, Tech and Our Financial Ecosystem is More Important Than Ever
Techcrunch | Ann Marie Mehlum, Javier Saade | April 10, 2020
The two of us oversaw the U.S. Small Business Administration’s capital, investment, loan and innovation programs serving America’s small businesses. The nation is rooting for our 30 million small businesses. They employ more than half of the country and create most net new jobs, and 80% of them have less than 60 days cash on hand.
The world has never experienced dislocation of labor and business activity at this scale and speed. We applaud Congress and the White House for stepping up with a $2 trillion relief package, of which, $350 billion is being injected into America’s small businesses. Another $250 billion is being contemplated and negotiated as we write this.
See: First two fintechs added to coronavirus emergency loan scheme (UK)
Washington has been talking regularly with the financial sector, and for small business relief to be effective, banks of all sizes, fintechs, other tech companies, community banks and other capital conduits need to be involved in the solution. There is an urgent need to deploy the funds, and technology will be critical to that end.
Two encouraging developments occurred on Wednesday: 1) SBA launched a new AWS-powered gateway for a streamlined lender entry point and 2) an application for non-bank, non-insured (read: fintech) lenders was made available.
Good steps for sure, but retrofits always come with limitations at their root.
Looking back to move forward, the crisis of 2008 was in many ways a “dress rehearsal” of what we are experiencing now. While there are some similarities, the pandemic’s massive toll on virtually every sector of the economy is happening simultaneously, as evidenced by the fact that 17 million people have filed for jobless claims.
This 21st century problem requires 21st century solutions, and that requires fresh thinking, from policy-to-execution. The large part of our economy that lives at the intersection of small business and the financial system is expecting this thinking and execution.
See: UK fintech community comes together to build Covid Credit and let sole traders self-certify lost income
It must be pointed out that some constraints and limitations of implementing the CARES Act are not regulatory in nature — they are born out of legacy technologies that slow banks down. The antiquated systems of our government agencies, such as SBA’s much talked about and clunky E-Tran system, do not help either.
Government agencies, let alone their systems, were not built to deal with anything of this magnitude and urgency. But the inherent scalability, penetration, infrastructure, algorithmic capability and plumbing of financial technology should be brought to bear, and now!
The financial system has significant tech adoption lags, organizational inertia and regulatory constraints — all contributing to the chaotic nature of the programs’ implementation. The design of a potential fourth phase of relief should take this into account. While pumping more money into small businesses is a good decision, the process and its underpinning needs to be improved.
Probably more important for people to understand is that when banks secure loan guarantees, that does not immediately translate to funded loans injecting cash into small businesses.
For cash to move, a few things would help smooth the glide path from CARES Act to small businesses:
1) finalizing definitive guidance on bank notes;
2) enhancing secondary market liquidity;
3) developing a 21st century digital interface for more streamlined touch points for all stakeholders; and
4) opening the pathway to new players, including fintech companies as service providers, rails or lenders themselves.
This is important because SBA has been tasked to increase its capacity by a factor of at least 50. All of its credit programs combined put out $25 billion a year. The task at hand: $350 billion in 8-12 weeks. We know SBA has been working 24×7 — along with Treasury, FRB and other agencies — on systems, technology and execution, but there are real friction points working against solving the problem at hand.
See: Survey finds Canadian small businesses seeing 50 percent revenue decline amid COVID-19
The use of digital constructs and 21st century technology is highly needed due to the amount of dollars, number of loans and the short window we have to deploy them. We urge the SBA, other agencies and regulators to deploy energy and resources to leverage digital finance and financial technology.
Financial technology can help streamline applications, comply with know-your-customer and anti-money laundering rules and application automation. Technology also improves origination, underwriting, loan disbursement and loan servicing, and should be leveraged. Millions of small businesses, the most vulnerable ones in fact, don’t use bank credit. Yet many use Square to accept payments, for example. Fintech now has an open door to participate — good!
We encourage regulators to fully leverage the collective capabilities of technology.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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First two fintechs added to coronavirus UK emergency loan scheme
Small Business UK | Timothy Adler | April 11, 2020
OakNorth Bank and Starling Bank are first two fintechs added to the Coronavirus Business Interruption Loan Scheme to help spread out demand
The first two fintech banks have been added to the government’s coronavirus emergency business interruption loan scheme in an effort to break the logjam.
Other fintechs, including Funding Circle, Iwoca and Market Finance, which together have provided loans worth billions of pounds to small businesses, are also hoping to get approval to join the emergency loan scheme next week.
Only 2,500 loans worth £450m, have been agreed so far through the Coronavirus Business Interruption Loan Scheme (CBILS) out of a small business population of 5.9m.
See: Canadian small businesses are facing extinction amid lockdowns
Bankers say they have been overwhelmed with applications through the CBILS, with an estimated 300,000 enquiries.
Plus they complain that their loan book must be scrutinised by the British Business Bank, which itself is overwhelmed by the volume of loan applications.
Yesterday, former Treasury secretary Baroness Morgan called for the CBILS to be opened up to fintechs, which, she said were more agile and more nimble than traditional lenders.
OakNorth Bank and Starling Bank have been added to the dozens of existing accredited lenders, alongside Cynergy Bank and The Co-Operative Bank.
Keith Morgan, CEO, British Business Bank, said: “Our accredited lenders have seen an incredible demand for CBILS in the past few weeks, so we are helping to meet that demand and provide even more choice for smaller businesses by approving additional lenders for accreditation to the scheme. These new lenders will be able to deploy vital funding and get additional finance flowing to smaller businesses across the UK as quickly as possible.”
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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FintechBeat Podcast: Save the Money
Roll Call | Chris Brummer | April 7, 2020
Fintech Beat sits down with Linda Jeng and Dan Gorfine to talk about how online lending, open banking and a digital dollar — with the right policies — could immediately improve the plight of those affected by the coronavirus.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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How Governments Should Use Crowdfunding to Battle the Economic Impact of #Socialdistancing
Crowdfund Insider | | March 31, 2020
The Crowdfunding industry is well aware of what economists call externalities – the fact that behavior of some people has an unintended impact on other people. Positive externalities can be observed on the Crowdfunding platforms every day due to the willingness of people to join their forces. These days, everyone becomes aware of the impact other people have directly on our lives, health, financial situation, liberties.
Crowdfunding platforms were very quick in meeting the challenge of channeling funds to those places where they are needed. Governments are now pumping billions and most likely trillions of dollars through the banking system into the economy. The alternative finance industry should not be ignored when creating the right response to the COVID-19 pandemic.
RESILIENT CAPITAL: How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus
What could governments do?
They could support the donation-based platforms by reimbursing transaction fees, because essentially it will allow more donations to flow. They could also facilitate partnerships between municipalities, regions, and platforms that encourage local donations to local projects. For instance, the platform Helfen.Berlin which collects donations for companies in exchange for gift certificates is a private initiative from the start-up industry, but it charges around 3% in transaction fees. The city of Berlin could easily support this initiative by covering these costs. This form of civic crowdfunding will be an important pillar in creating regional demand and financial support.
Some, such as the City of Berlin, are enabling access to webinars, in this case with the Crowdfunding Campus. The support could go way beyond that.
A lot of SMEs may not apply to receive the wide range of support measures given by the government, because the application procedure is too tedious or too complicated, or simply because the SME does not fit into the support categories.
But the governments could easily match the contributions from the crowd, for instance, and pledge that for every Euro in pre-sales the government contributes 0.25 Euro up to an amount of 1000 Euro. Therefore, if an SME raised 4000 Euros from the crowd, it would receive an additional 1000 Euro.
Of course, these sums are small compared to what can be raised on equity- and lending-based Crowdfunding platforms. It is too early to see the impact that COVID-19 will have on those startups, real estate, and renewable energy investment financed on equity platforms.
Start-ups might have a difficult time in the next couple of weeks, although some business models in electronic retail or electronic services might scale much quicker. But other startups might have a hard time, so we would not be surprised to see the insolvency rate going up.
SEE: Canadian securities regulators propose new nationally harmonized crowdfunding rules for comment by May 27
In real estate equity-based crowdfunding, it depends on each location, at least in Germany and the Netherlands, it is not expected that housing prices and rents will decrease immediately, so the case for investing in real estate through crowdfunding platforms might still be there.
For renewable energy projects, the investment case continues to be strong because the climate crisis needs continued investments into solar and wind.
For all three types of equity-based crowdfunding, the investments have a long-term perspective, the payout is in the future, and at that time the markets and economies might have recovered. So investors who took a hit in the stock market might look for these platforms to diversify their portfolio, so at least in the medium-term, we should see increased investor appetite.
The equity-based Crowdfunding platforms in Germany, the Netherlands and in Europe, in general, have responded to the challenge by increasing their capacity to onboard SMEs. The Austrian-German platform Conda created the #condahilft-Landing page and promised to reduce the fees on all SME funding rounds on their platform.
In many countries, we can see that the investors don’t only want a financial return, but want the projects to succeed. In the Netherlands, all the large equity-based crowdfunding platforms announced that their investors will agree to a grace period between 3-6 months in which the project or company doesn’t need to pay the interest and does not need to repay their loans.
Aescuvest, an equity-based crowdfunding platform based in Germany with a focus on health startups created a fast-track for start-ups developing vaccinations against Covid19 and is currently in the process of partnering with other equity-based Crowdfunding platforms in Germany.
Fundedbyme, a Swedish equity-based Crowdfunding platform, has opened its platform to include donations as well, which is a sign of the shifting business models of platforms.
In the Netherlands, the banks have access to a guarantee fund if loans get into default. This week Dutch crowdfunding platforms will also get access to these funds, providing additional support for individual crowdfunding investors. This will create additional support for companies that are now in need of attracting additional funding.
MORE: Getting In Early: SEC Sees Growth In Equity Crowdfunding
Some of the lending platforms in Europe have announced a freeze on repayments, but there is not yet evidence that governments are supporting lending platforms to recoup these costs.
There is anecdotal evidence that investor appetite is decreasing on lending-platforms throughout Europe, with investor forums advising to shift peer-to-peer investment back towards cash and other more liquid assets and investors not willing to invest in new loans because of the uncertainty in the market. The numbers of people and companies seeking loans have increased on the platforms – the increased supply and decreased demand for investments into loans made it necessary that the owners of loans had to provide substantial rebates in order to sell off their portfolio. The interest rates on new loans have increased at many lending-based crowdfunding platforms. For the platforms, the next couple of weeks might be quite difficult, since often their fee structure is based on the repayment of the loans, not just on the intermediation.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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UK fintech community comes together to build Covid Credit and let sole traders self-certify lost income
TechCrunch | Steve O'Hear | March 24, 2020
It all started with a tweet from 11:FS co-founder Simon Taylor. If the U.K. government could be persuaded to provide financial support to the self-employed during the Coronavirus crisis, as it has already pledged for full-time employees, then Open Banking technology could be used to self-certify lost income, and therefore overcome one of the main hurdles of administering potential compensation.
The founders of two other London-based fintechs, Fronted and Credit Kudos, were first to accept the challenge, and soon they were joined by dozens of other volunteers from the wider U.K. fintech community with the aim of turning around a working prototype of “Covid Credit” in just 48 hours.
See: Fintechs getting a boost from coronavirus outbreak
“Like many, we saw a challenge for non-salaried workers who are currently ineligible for government relief,” says Fronted’s Jamie Campbell. “By using Open Banking, we have been able to quickly develop a simple process that allows non-salaried workers to generate a proof statement which details their past income and the impact of COVID-19”.
The Covid Credit team’s hypothesis is that evidencing and validating the income of a sole trader is significantly harder than a salaried worker, and that there was an opportunity to use Open Banking (via Credit Kudos’ existing API) to quickly access and analyse data from the bank accounts of a sole trader and generate a validated income statement, something Campbell frames as a “Covid Credit ‘minted’ self-certification”.
“Using the application, applicants answer a few simple questions relating to their legal status and the impact of COVID-19 on their income,” he explains. “The application processes this information and creates a unique link that (in time) can be shared with the appropriate government body in order to prove loss of income.”
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Canadian small businesses are facing extinction amid lockdowns
The Globe and Mail OpEd | Cato Pastoll | March 24, 2020
No one planned for this. COVID-19 has brought the global economy to a standstill. With many provinces closing non-essential businesses, and consumption and consumer confidence decreasing, many Canadian small businesses are looking at extinction.
Businesses surveyed by Lending Loop, on average, have less than 30 days of cash on hand to weather this storm. This is not a new finding. In 2016, a JP Morgan study showed that the average restaurant, retailer and manufacturer had 16, 19 and 30 days of cash on hand, respectively. As revenue declines continue in the coming weeks and months, their futures look incredibly bleak.
By all accounts, the federal government knows small and medium-sized businesses constitute the backbone of our economy because they support at least 70 per cent of all jobs in Canada. Yet, the majority of our governments’ efforts are dedicated to supporting individuals and not businesses. While the enhanced Employment Insurance programs are helpful measures, the disappearance of our businesses would mean there would be no jobs to return to once the pandemic is over.
See: Lending Loop Surpasses $50 million Milestone and helps thousands of Canadian Businesses and Investors
The importance of small and medium-sized businesses in Canada cannot be overstated. Canadian small businesses make up 41.7 per cent of our GDP. Businesses with fewer than 10 employees make up 73.5 per cent of the private-sector employers in Canada. From 2013 to 2018, 56.8 per cent of all new jobs were created by small businesses. To put these numbers into perspective, small businesses in Canada collectively employ six times more Canadians than large Canadian businesses. In Canada, they are the giants of our prosperity.
At Lending Loop, we have supported Canada’s small-business community with financing for five years. Over the past week, our team has collected data every day from Canada’s small-business community, and the picture these data paint is more concerning than anyone could have imagined: While the magnitude of the effects of COVID-19 do depend on the industry and size of business, almost every single small-business owner is staring at the possibility of closing their doors for good.
We know the federal government will step in for the banks, airlines and oil companies, but Canadians need our municipal, provincial and federal governments to step in and support the real engine of our economy: small businesses. Every small business in Canada is on a countdown clock to extinction. We would not recognize our country without them.
Small businesses in the food service, travel and tourism, retail and education industries are looking at March revenue declines of 70 per cent or more. Revenue declines of this magnitude will initially result in layoffs, delaying payment to vendors and suppliers (other small businesses), and eventual closure. As layoffs continue to grow, consumer demand will decline significantly, further compounding the economic challenges for our economy.
Governments around the world have understood the role of small and medium-sized businesses in the health of their national economies, and have begun to take swift action. Britain has announced that 80 per cent of payrolls for private companies will be paid by the government, in addition to offering an emergency loan program for businesses, which is expected to include a guarantee program utilizing fintech lenders that can deploy capital quickly. In Denmark, the government is covering 75 per cent of wages to avoid mass layoffs. The U.S. government is currently voting on a stimulus package that includes significant payroll support for small businesses.
See: Survey finds Canadian small businesses seeing 50 percent revenue decline amid COVID-19
While Business Development Canada has been given more funds to lend, most Canadian small businesses are not eligible to access their loan programs and one Crown corporation cannot possibly deal with the magnitude of this issue alone. Solutions such as the 10-per-cent wage subsidy, and deferred tax and hydro bills barely scrape the surface of the problem. No current measure in Canada goes far enough to keep small businesses - your local restaurant, coffee shop, retailer, bookstore, hair stylist or wellness provider - alive or with any viable prospect of future return.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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European fintech lending industry to hit USD 9.6 billion in 2020
LLB | Staff Reporter | March 3, 2020
Innovative lending services, such as crowd and P2P marketplace loans, are becoming increasingly popular in many European countries. With the development of financial technology, recent years have witnessed a growing number of business customers and private borrowers using these digital financial services.
According to data gathered by Finanso.se, the European fintech, or the alternative loans industry, is expected to hit a $9.6bn transaction value this year, growing by 10% year-on-year.
Crowdlending generates nearly 70% of total market transaction value
After the financial crisis, many traditional banks became very restrictive in approving loans, especially in some European countries, leaving businesses and individual consumers with no access to much-needed cash. This created space for lending platforms, which connected borrowers directly to lenders, and removed the banks from the equation.
See: Lending Loop Surpasses $50 million Milestone and helps thousands of Canadian Businesses and Investors
Lending platforms use sophisticated computer algorithms to make lending decisions, provide fast loans, and lower rates to borrowers. Investors, on the other hand, are given the ability to easily invest in loans outside of their countries at attractive returns.
In 2017, the European fintech lending market hit $6.3bn value, revealed the Statista Alternative Lending Market Outlook. By the end of 2018, the market value increased by 20% and reached $7.5bn worth. The rising trend continued in the next twelve months with the entire market reaching $8.7bn value. The statistics indicate the European fintech lending industry is expected to show an annual growth rate of 3.0% between 2020 and 2023, resulting in a $10.5bn transaction value in the next three years.
The market’s largest segment is crowdlending or peer-to-peer business lending. In 2017, European peer-to-peer loans in the business sector reached $3.6bn worth. Over the last three years, the market value of the crowdlending loans increased by more than 75% and hit $6.5bn transaction value in 2020. Statistics show this amount will grow to nearly $7.2bn in the next three years.
Consumer peer-to-peer loans are forecast to edge up to $3.1bn value in 2020, twice less than business lending.
Number of European FinTech loans to reach 1.3m by 2023
Although peer-to-peer business loans represent the leading market segment, the statistics indicate a much higher number of consumer peer-to-peer loans in Europe. In 2017, there were more than 911,000 successfully funded alternative loans in the consumer segment.
See: Lock BTC, Get DAI: Lending Firm Bridges Bitcoin-DeFi Divide in Latin America
Business peer-to-peer loans reached over 63,000, or 14 times less compared to consumer loans. In the last three years, consumer and business alternative loans rose to 1m and 75,900, respectively. The average funding per loan in the crowdlending segment is expected to reach $86,185 this year. Statista survey indicates the total number of European fintech loans will amount to over 1.3m by 2023.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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