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Author: Sacha Bright & Oliver Murphy
Some two weeks ago, NextFin reported on how Peer-to-Peer lenders, JustUs and Assetz Capital had applied to become accredited lenders of the government’s Coronavirus Business Interruption Scheme.
Application forms for the Loan included eligibility criteria based on the Enterprise Finance Scheme, which excluded P2P lenders. However, the forms had been updated, with criteria that appear to have been expanded to take into account P2P lenders.
Today, NextFin has learnt that four new lenders have been approved for the Coronavirus Business Interruption Loan Scheme (CBILS), yet not one is a peer-to-peer lender.
The four lenders are believed to be the Co-operative Bank, Cynergy Bank, OakNorth Bank and Starling Bank all of which will start making preparations to lend under the scheme.
The CBILS was announced by the Chancellor Rishi Sunak in early March to provide financial support through the British Business Bank (BBB) to businesses in the UK that are losing revenue as a result of the coronavirus outbreak.
The BBB has announced it is accelerating the applications of new lenders to extend the scheme’s scope and has “significantly increased” the size of its accreditation team to manage the influx of interest.
In a statement, Keith Morgan, CEO of the 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.”
It said it is reviewing applications from a wide range of lender types - from PRA-regulated banks, to debts funds and asset finance lenders.
According to figures released by City AM last night, there have been 309,000 CBILS applications, and only 2,022 approvals worth a combined value of 291.9m. This represents an approval rate of just 0.65% - down from 0.73% when the scheme launched - an average loan size of £144,362 and less than 10% of the scheme funds.
In a letter seen by NextFin, Conservative MP Kevin Hollinrake, co-chair of the All Parliamentary Group on Fair Business Banking, called for the British Business Bank to add non-major bank lenders to the loan scheme and labelled the initial launch a “major disappointment”.
Sacha Bright, CEO of NextFin stated: “We should be asking ourselves: why in the face of this crisis and with the P2P industry now regulated by the Financial Conduct Authority (FCA), has not one P2P lender been approved?”
He added: “The government needs to recognise that a good way to get money to small businesses quickly is to extend the CBI Loan to all regulated P2P lending sites. In doing so, the government could provide P2P lenders with a guarantee of 80% on each loan to give investors further confidence to invest through P2P platforms.”
Disclaimer
Please remember P2P lending is not guaranteed by the Financial Services Compensation Scheme (FSCS), so at the moment your money is at risk if you decide to invest in a P2P site
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