Peer-to-peer lenders are awaiting clarification on whether they can offer the new coronavirus business interruption loans, but one platform boss has suggested rule changes would be required.
Lee Birkett, founder of JustUs, has said that P2p regulations – under article 36H – would need to be changed in order for the industry to be eligible for the scheme. He said this would be similar to the way the Bank of England has cancelled stress tests and the way that state aid rules have been waived so banks can facilitate the emergency loans.
It comes as the British Business Bank (BBB) unveiled details of the coronavirus business interruption loan scheme, with its list of accredited lenders showing banks and some alternative providers but no P2P platforms.
“Banks have been given stress testing exemptions but because we are P2P we are not regulated or engaged with the regulatory authority or Bank of England in the same way to be able to access the loans,” Birkett said.
“The government will have to do something.
“Banks have been saying to my customers that they have to go through us as we have the security on their current loans.”
Fintech firms such as Tide have been asking to be included as accredited lenders but it is unclear so far whether the government and the BBB will allow this.
The BBB is currently inviting financial services firms to apply to become accredited lenders in a similar way to the criteria for enterprise finance guarantee (EFG) loans.
However, P2P lenders have previously been excluded from these.
“Where the applicant is a P2P intermediary which pairs borrowers and individual lenders, it will not be considered a suitable delivery partner for EFG,” the guidance said.
“This is because of their differing structures and diverse sources of funding which make the P2P platforms unsuitable.”
BBB has been asked for comment.
Meanwhile, the Financial Conduct Authority (FCA) issued guidance to firms providing the coronavirus emergency loans, urging them to take into account appropriate evidence, including historic trading figures as well as future forecasts.
It also advises lenders to consider deferring payment if forecast income does not arise.