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More Lenders Approved For Larger Coronavirus Loan Scheme

Posted 4 years ago

More Lenders Approved For Larger Coronavirus Loan Scheme
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As the UK continues to grapple with the economic impact of the coronavirus crisis, the British Business Bank has approved three more lenders to deliver the Coronavirus Large Business Interruption Loan to support the larger firms hit by Covid-19. 

Among the lenders to be accredited are the Allied Irish Bank, Investec Bank and Mercedes-Benz Financial Services. 

Designed to support larger firms, CLBILS offers finance to mid-sized and larger UK businesses that can demonstrate a turnover of more than £45m that are suffering from disruptions in cash flow as a result of the pandemic. 

However, no peer-to-peer platforms have yet been approved to offer CLBILS loans. To date only four platforms, including Funding Circle, Assetz Capital , Lending and Folk2Folk, have been approved to offer loans under the Coronavirus Business Interruption Loan Scheme (CBILS), with Funding Circle expanding to offer loans under the Bounce Back Loan Scheme (BBLS). 

Figures published by the Treasury reveal that lenders have provided £38.2bn through the three major government-backed lending programmes. £3.3 billion has been approved to 83,000 businesses in the past week, with more applications expected to be approved in the coming days as the industry continues to help the UK get through these tough times.

These government-backed schemes are part of the banking and finance sector’s plan to help businesses in the UK through the coronavirus crisis. Research by UK Finance BVA BDRC found that finance delivered through CBILS and BBLS is reaching those businesses who need it most, with 58 percent of businesses who have secured funding from the two schemes saying they have less than three months in cash reserves, compared to an average of 39 per cent across all businesses. 

For larger businesses, £1.8 billion has been approved via the Coronavirus Large Business Interruption Loan Scheme (CLBILS) to 279 firms, including 35 new approvals in the past seven days.

Stephen Jones, CEO of UK Finance, said: “Businesses of all sizes are facing unprecedented challenges in the face of the pandemic, but the banking and finance industry has a clear plan to get them through.

“Lenders have provided over 910,000 businesses with £38 billion through the government-backed lending schemes to date, with tens of thousands of approvals every day, ensuring financial support reaches those firms who need it most. 

According to Sacha Bright, CEO of Nextfin: “Although it is good to see that the British Business Bank has approved more lenders, I still believe the government has missed a huge opportunity to encourage private investors to invest in P2P platforms, by approving them to offer CLBILS government-guaranteed loans. 

 “This would mean that retail investors could accrue a higher interest rate that would be backed by the government. There is over £60bn currently sitting in cash-ISAs earning little or no interest. Why not encourage these funds to be invested directly into struggling firms, to save them from the coronavirus crisis? This is especially true at a time when the government has reduced saver’s interest rates to nearly 0%”

Author: Sacha Bright & Oliver Murphy


To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed. Nextfin is not liable for any damages arising from the use of or inability to use this site or any material contained in it, or from any action taken as a result of using the site. 

Tagged: sme entrepreneur coronavirus cbils clbils news alternative finance equity crowdfunding

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