- The UK Chancellor has extended the deadline for all four government coronavirus support schemes.
- The government also announced that the BBLS and CBLILS can be repaid over 10 years rather than six.
- Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Fintech industry with the Fintech Briefing. You can learn more about subscribing here.
The UK Chancellor of the Exchequer has extended the deadline for all four government support schemes to the end of November, Crowdfund Insider reports.
The Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CBLILS), the Bounce Back Loan Scheme (BBLS), and the Future Fund provide small- and medium-sized businesses (SMBs) with access to government-guaranteed loans amid the pandemic.
The government also announced that the BBLS and CBLILS can be repaid over 10 years rather than six, and that SMBs can make interest-only payments or stop repayments completely for up to six months without affecting their credit rating. The schemes have so far facilitated 1,328,091 loans worth £57.3 billion ($73.13 billion).
Over the past few months, accredited alt lenders cemented their position as viable alternatives to traditional lenders by easing SMBs' access to the government schemes. UK banks struggled to cope with the demand for emergency funding, leading to SMBs facing delays and growing dissatisfaction.
HSBC, for example, came under fierce criticism for its handling of the BBLS. This presented an opportunity for fintechs to swoop in, offer easier access to the government loans through fast online onboarding processes, and grow their customer base.
Neobank Starling had issued £654 million ($849 million) under the BBLS by July, for example, and it now holds 180,000 business accounts—up from 51,000 at the same time last year. Others have also partnered to take full advantage of the schemes: MarketFinance and Ebury, for instance, have teamed up to expedite the final stretch of CBILS lending.
With the shortcomings of traditional lending processes now laid bare, the extension will push banks to improve their SMB lending capabilities—which fintechs can accelerate. Partnering with alt lenders would enable banks to rapidly implement the necessary upgrades to streamline SMBs' access to loans.
Iwoca's OpenLending platform, for example, allows banks like RBS to integrate the fintech's lending capabilities into their own offerings via an API. Banks' SMB clients then have access to iwoca's faster process, boosting customer loyalty and satisfaction.
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