Funding Options, the marketplace for business finance, received a record £1bn worth of loan applications from businesses in March as the coronavirus cashflow crisis looms.
However, lenders across the industry are tightening their funding criteria, meaning businesses aren’t able to access finance.
More than 10,000 businesses requested loans that sit outside of the government’s Coronavirus Business Interruption Loan Scheme, suggesting that many firms can’t wait for the loans guaranteed by the government, or simply aren’t able to access them due to stringent requirements. As well as organic requests, there was also a 100% increase in the number of referrals coming through from the Banking Referral Scheme, as high street banks reject more businesses than during normal periods.
Funding Options is working hard to match businesses to lenders who may be able to help them through this tough time. Last week, the government announced that the CBILS would be extended to alternative lenders, which should hopefully help mitigate the effects, but it can go further.
Funding Options is calling on the government to bring the wider fintech industry into the fold, and include marketplaces and aggregators to help businesses find solutions to their cashflow worries, and spread the load on lenders.
David Keene, CMO, Funding Options said,“The banking system needs to pull together to help our businesses survive. At present, the government’s Coronavirus Business Interruption Loan Scheme is only helping businesses that are low-risk.
“However, there are a number of businesses out there that normally would be able to access finance, but currently can’t under more stringent lending criteria. The key to untying the Gordian knot is to bring more alternative finance providers, B2B marketplaces and other fintech organisations into the solution to complement the big high street banks.”
Keene added, “Our data shows that businesses are really worried about their cashflow. They aren’t able to access loans through the normal routes, and lenders are understandably more risk averse during this crisis. The UK Fintech sector is agile and able to rise to this challenge, the government needs to reevaluate how it is supporting the UK’s independent businesses, because at the moment, many are falling through the cracks.”