Fintechs are giving up on ever being recruited to join the government’s emergency coronavirus bailout scheme for small businesses, despite being eager to do so.
The British Business Bank, which administers the Coronavirus Business Interruption Scheme (CBILS), has added four more lenders to the scheme – Allied Irish Bank, ThinCats, Paragon Bank and IGF – to join 48 existing accredited lenders.
However, just three of those which have joined the coronavirus loan scheme – Funding Circle, OakNorth and Starling Bank – are the kind of fintechs which have shaken up business lending.
British Business Bank says that 80 per cent of Britain’s small business have a relationship with one of the CBILS 52 accredited lenders, and that it is speeding up onboarding of new lenders to further extend the scheme’s reach.
>See also: What is the British Business Bank? – a Growth Business guide
But, according to the Telegraph, 100 other lenders are champing at the bit to join the BBB’s accreditation process and some are losing hope.
This is despite 60 per cent of small businesses saying they will run out of cash within 12 weeks, according to the Association of Accounting Practitioners.
Oliver Prill, chief executive of fintech Tide, which is still waiting for accreditation from the BBB, told the Telegraph the process had been “very slow”.
“What we have realised at the BBB level is that it is clearly not set up for anything close to this scale. Why does it take so long when there is clear political will to get this going?” he said.
One source told the newspaper the real problem was that, despite having upped the number of people sifting lender applications from two to 25, the team is still understaffed and struggling with the workload.
Meanwhile, according to the Federation of Small Businesses, although 16,624 CBILS loans have been approved, another 15,000 loans are in the queue waiting for approval.
Although chancellor Rishi Sunak is expected to announce 100-per-cent state guarantees for microbusiness loans of up to £25,000 to try and get things moving, the Federation of Small Businesses say that a straightforward grant would be simpler. If that cannot be done, said FSB policy chairman Martin McTague, then microbusiness loans should have some degree of forgiveness written in, as is the case with student loans.
Find your small business coronavirus grant – list of English councils