British Business Bank founding chairman calls for the organisation to take a bigger role in the post-Covid world
Taxpayer-backed loans are due to start ending in September, but the government has said they might be extended.
Taxpayer-backed loans issued by fintechs and others financial institutions supporting companies hurt by coronavirus should be administered beyond their deadlines if needed, according to the founding chairman of the organisation responsible for the loans.
Ron Emerson, the founding chairman of the British Business Bank (BBB), has called on the organisation to play a bigger role in the post- coronavirus world.
Speaking to The Daily Telegraph, Emerson, who led the BBB for nearly three years and is now chairman of lender B-North, said: “What we are seeing is a different economic world where the role of government is going to be central in the way the economy works.”
“What [Covid] has raised is the whole issue of financial infrastructure in this country across the board, and is it fit for purpose in the 21st Century.”
The Bounce Back Loan Scheme (BBLS) is due to end in early November, six months after its launch while the Coronavirus Business Interruption Loan Scheme (CBILS) ends September, six months after its launch.
But the government has said the schemes could be extended beyond their deadline.
According to Treasury figures, the banking and finance industry, including fintechs, have approved £47.9bn of lending to over 1.1m businesses to date through government-backed lending schemes.
Lending through the BBLS has totalled £32.8bn, along with £12.2bn through CBILS while £2.9bn has been lent through the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
The BBB has faced some criticism from large banks for slowing down the process of distributing funds while fintechs also criticised the BBB for not approving non-bank lenders quick enough the government-backed schemes.
However, the BBB has now approved a raft of non-bank lenders to the government-backed loans.
A further issue for non-bank lenders has been told they can’t get access to cheap finance from the Bank of England to deliver emergency governed loans.
Meanwhile, financial institutions lending to small and medium-sized companies are increasingly worried that companies could fold under significant debt.
Caroline Stockmann, CEO, Association of Corporate Treasurers, speaking to The Daily Telegraph, said some of her members had warned of a “very ugly’ second half of 2020.