THE BRITISH Business Bank (BBB) has expanded its Enable Funding Programme to include peer-to-peer lenders for the first time.
The scheme, which gives lenders access to capital market funding, had previously been open only to UK-based banks which lend, or intend to lend, to small- and medium-sized businesses (SMEs).
“Opening up the Enable Funding programme to P2P lenders will give them a similar opportunity to access capital markets more efficiently, increasing the amount of finance that they can provide to smaller UK businesses,” said a BBB spokesperson. “Providers of finance to smaller businesses often lack the scale required to access capital markets – a key source of funding for lending institutions – in a cost-efficient manner.”
Earlier this week, the BBB changed its request for proposal documents so that P2P lenders could start applying to the government-backed scheme.
Successful candidates will also be able to take advantage of a guarantee which covers a portion of a designated lending portfolio’s net credit losses in excess of an agreed ‘first loss’ threshold, which they receive in exchange for a fee. The BBB hopes that this will encourage more lenders to provide asset or lease finance to smaller businesses.
The Enable Funding programme was launched in November 2014 and has facilitated more than £200m of leasing and asset finance to approximately 4,000 small businesses across the UK.