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It's Time The Government Recognised The Benefits of Allowing Fintechs To Provide CBILS

Posted 3 years ago

It's Time The Government Recognised The Benefits of Allowing Fintechs To Provide CBILS
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Author: Sacha Bright & Oliver Murphy 

With less than 6,022 loans under CBILS approved last week, NextFin is one of many voices calling on the government to urgently approve fintechs to get essential cash to businesses struggling to fight coronavirus. 

Now P2P platform, JustUs, has launched a petition calling on the Treasury to allow business interruption loans to be channelled through fintech firms. The petition outlines how the scheme would work and argues that it would be much faster than relying on banks. 

The platform has suggested that, for loans up to £50,000, applicants could submit a self-declared application based on their 2019 revenues that could be signed online with loans issued within 24 hours. A financial adviser or accountant could verify pre-coronavirus revenues and cash flow for loans between £50,000 and £5m, Birkett argues, which could be distributed within 48 hours.

In the current climate, CBILS risks failing. Now, with a new name, these 40 accredited banks are meant to be able to lend a hundred times what they were previously able to do, in a fraction of the timeframe. But the fact is - they can’t. 

Why fintechs should not be ignored when drawing up solutions

The petition calls on the British Business Bank to approve more digital and non-bank lenders. So far, only one online P2P lender and two online fintech banks were approved last week, despite the scheme being introduced over a month ago. 

According to JustUs founder, Lee Birkett: “CBILS cannot be accessed by many small and innovative companies that do not meet all of the criteria.” 

“We are asking the UK government to approve digital lending platforms so they can deliver help quickly to small businesses and self-employed.”

As NextFin has asked many times, why is it the case that the British Business Bank has essentially ignored fintechs? 

Many people, including those within government have claimed that the UK is the world leader in fintech.

But whatever one’s opinion, the UK economy faces a crisis, the kind of which it has never seen. As such technology should be the key component to ensuring that businesses stand the best chance of surviving. 

Thanks to coronavirus, the risk for a generation of start-ups disappearing is increasing with each passing day. Fundraising for early-stage businesses has been replaced by merely trying to survive. It’s for this reason that the government needs to embrace all options and specifically think about how it can protect the country’s startups. This is where fintechs come in. 

With a perfect opportunity to demonstrate its overwhelming benefits, the government has essentially turned its back on the fintech sector, with less than 3 having been approved in over a month. Indeed, the British Business Bank (BBB) has been acting as if fintechs are incapable of being equipped to deal with the overwhelming requests for help from SMEs. 

The UK government should follow the lead of other countries by introducing simple schemes like we’ve seen in Switzerland, where loans have been provided within 24 hours to SMEs using a one-page application form. Indeed, Fintechs have the speed and technology to deploy capital quickly. 

With the UK economy fighting to survive and its SMEs bearing the brunt of the downturn, it’s time for the government and the BBB to turn its pledges into real action and back the fintech sector to help our businesses get to the other side of this crisis.


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. 

Tagged: News P2P CBILS

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