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Bounce Back Loans saved SMEs, but more still needs to be done, say CEOs of alternative lenders

Christoph Rieche, CEO of iwoca, and Chirag Shah, CEO of Nucleus, are calling on industry leaders to give alternative lenders the chance to help SMEs past the BBLS’ November deadline.

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Christoph Rieche/iwoca

This morning two alternative lenders have come out to praise the government-backed Bounce Back Loan Scheme (BBLS), while also calling on traditional banks to leave the door open for alternative lenders to keep supporting SMEs beyond the BBLS deadline. 

iwoca and Nucleus Commercial Finance have both lauded the success of the 100-per-cent-backed programme aimed at helping the UK’s smallest businesses. 

The Bounce Back Loan Scheme is, by far, the most popular government provided scheme, with the programme accounting for two-thirds of the total amount lent out, coming to over £38bn to date. 

Despite the Chancellor’s extension to all three government loan schemes, there still remains the questions of what will happen to SMEs if there is a second lockdown, with fintech leaders calling for more change within the industry to help support SMEs through the nest stage of economic recovery.   

Christoph Ricehe, CEO of iwoca, said: “The launch of the Bounce Back Loan scheme was a watershed moment for hundreds of thousands of SMEs across the country. However, if smaller businesses are going to be able to access the finance they need after the scheme ends, then fintechs need to be given a greater opportunity to do what they do best.” 

“The Covid-19 pandemic has exposed the cracks within the ecosystem of small business support. Bounce Back Loans managed to paper over these, but we now have an opportunity to fully address these weaknesses and give SMEs the brighter future they deserve.” 

In order to remedy the looming deadline, Rieche is calling on industry leaders to help level the playing field to ensure fintechs have the same access to capital as traditional banks, a greater level of cooperation between banks and non-bank lenders to give SMEs the best chance of accessing finance and the acceleration of open banking to strengthen channels of communication. 

Research from Nucleus has discovered that nearly three-fifths of SMEs (57 per cent) had to adapt to survive the pandemic, with over a quarter (27 per cent) saying the new strategy is a success. 

Chirag Shah, CEO of Nucleus Commercial Finance, echoed Rieche’s sentiment: “British businesses have always remained resilient in the face of adversity and this insight shows that Covid-19 is no exception. It’s encouraging to see that SMEs are adapting their approach to navigate uncertain times, which will stand them in good stead for what is likely to remain a challenging landscape for some time.” 

“As an industry we need to ensure that they know there are partners who can support them in accessing the finance they need, quickly, to support their short and long-term goals.” 

At the start of the crisis, it took the British Business Bank several weeks to accredit a fintech to one of the government lending schemes, but since then, fintechs and non-bank lenders have been instrumental in keeping the nation’s SMEs afloat. 

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