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More Lenders Approved For Coronavirus Loan Schemes, But Not One Is P2P

Posted 4 years ago

More Lenders Approved For Coronavirus Loan Schemes, But Not One Is P2P
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The British Business Bank has accredited several lenders for government-backed emergency loan schemes aimed at supporting businesses through Covid-19 but not one is a peer-to-peer lending platform.

The Bank has approved five new lenders for accreditation under the Coronavirus Business Interruption Loan Scheme (CBILS), four under the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and one under the Bounce Back Loan Scheme (BBLS)

CBILS provides loans of up to £250,000 without personal guarantees to small- and medium-sized enterprises. Growth Lending, inFund, Invocap, NEL Fund Managers and Triple Point have been approved to deliver the scheme.

CLBILS, which is aimed at larger businesses with a group turnover of more than £45m, has a maximum cap of £20m for loans. New CLBILS lenders include: Greensill, Metro Bank, Secure Trust Bank and OakNorth Bank, which has also recently been approved to deliver CBILS.

The Bounce Back Loan Scheme provides loans up to £50,000 and is backed by a 100 per cent government guarantee.

The fact that not one of these newly accredited is a P2P platform is concerning. NextFin, the alternative finance comparison site which represents all platforms, is aware of dozens of P2P lenders that are applying to the British Business Bank to deploy these loans and has reported on the slow uptake of P2P lenders being accredited under the schemes. 

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''.

NextFin has called for the government to expand the scheme to alternative finance lenders to save small businesses.

Commenting on the news, CEO of Nextfin, Sacha Bright, said: "The economic landscape is changing rapidly. As a result, it’s essential small businesses have access to fast and flexible funding built around their needs. 

"P2P platforms are the answer to this. The reason why the P2P market has expanded so quickly over the last 8 years is because platforms are fast and efficient in their lending processes, utilising the latest financial technology."

"With this in mind, surely, the best way to get money to small businesses quickly is to extend government-backed loans to P2P lending sites? Under the scheme, the government could provide P2P lenders with a guarantee of 100% on each loan to give investors further confidence to invest through P2P platforms to continue to lend to SMEs.”

Author: Oliver Murphy and Sacha Bright


To the best of our knowledge, the information we have provided is correct at the time of publishing. SEIS and EIS tax benefits are dependent on your financial circumstances. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed.

Tagged: news coronavirus cbils bbls P2P alternative finance

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