First two fintechs added to coronavirus UK emergency loan scheme

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Small Business UK | Timothy Adler | April 11, 2020

OakNorth Rishi Khosla - First two fintechs added to coronavirus UK emergency loan schemeOakNorth 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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