Starling Bank and OakNorth among new lenders added to coronavirus loans panel

By Daniel Lanyon on Tuesday 14 April 2020

Alternative LendingDigital Banking

The British Business Bank has added the two fintech lenders as well others to its Business Interruption Loan Scheme roster.

Starling Bank and OakNorth among new lenders added to coronavirus loans panel
Image source: Starling Bank

The British Business Bank has approved four new lenders for accreditation under the Coronavirus Business Interruption Loan Scheme (CBILS) - The Co-operative Bank, Cynergy Bank, OakNorth Bank and Starling Bank.

For several weeks fintech lenders, such as the latter two firms, have questioned the rollout of the CBILS which aims to shore up small business liquidity in the wake of the coronavirus induced uncertainty. 

The likes of Liberis' Rob Straathof have said that fintech lenders can channel £1bn per month to SMEs in the UK while Funding Options saw more than £1bn loan applications in March alone. LendInvest's founder Christian Faes argues this week that the UK would do well to follow Australia’s lead and support non-bank lenders.

The British Business Bank says it is "accelerating" the onboarding of new lenders to "further extend the scheme’s reach" and has significantly increased the size of its accreditation team to manage the volume of interest.

 The Bank is reviewing applications from a wide range of lender types – from PRA-regulated banks, to platform lenders, debt funds, invoice finance lenders, asset finance lenders and responsible finance lenders. 

Keith Morgan, CEO, 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.” 

 "These new lenders will be able to deploy vital funding and get additional finance flowing to smaller businesses across the UK as quickly as possible.”

Oliver Prill, Tide's CEO sys the speed of accreditation must increase, and must include more fintech businesses for the CBILS to have the desired impact. 

"The number of loans being delivered to SMEs demonstrates that the scheme is not running efficiently - the latest figures state that only 4,200 loans have been granted from over 300,000 applications. This is concerning as our research has told us that collectively, small business' revenue is set to decline by 57 per cent by the end of April, and that over one in three (36 per cent) expect their revenue to decline by more than 90 per cent in April 2020 compared to April 2019, time is of the essence to avoid the large scale collapse of small businesses."

"So far, only two fintechs have been accredited by the scheme, suggesting that the British Business Bank has its prioritisation criteria wrong. The UK's thriving fintech sector has the technology to process applications and make decisions quickly, as well as having extensive reach - Tide has the widest SME reach of all non-accredited organisations, representing one in forty SMEs."

“We are urging the British Business Bank to be transparent about it's priorities, and to avoid reverting to type by prioritising organisations that follow the traditional model and will struggle to work at the speed needed. If this does not materialise, ministerial intervention is needed to ensure SMEs get the support they need in a timely manner."

Nic Conner, Rangewell Head of Research says the push to get platform and fintech lenders onto the Scheme seems to be moving ahead but speed is still of the essence.

"Over the last decade, the platform lenders have built quality infrastructure and credit processes - literally world-class - and have been supported and praised by successive governments and The Treasury."

"Given this, it would be remiss to not incorporate such expertise and resources into the Coronavirus Business Interruption Lender Scheme as quickly as possible.


 

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