A group of fintechs have been developing ‘Covid Credit’ to help sole traders apply to the government for emergency funding during this time.
Many self-employed or sole traders may now be facing uncertainty in their cashflow due to difficulties calculating their actual income.
Credit Kudos, Fronted, 11:FS, Coconut, Capital on Tap,Mazuma, Seedlegals and True Layer have been developing the tool that allows the user to fill in banking data and create a straightforward PDF report, which can then be shared with HMRC to display the user’s financial situation.
“Covid Credit is a tool that we hope will really make a difference to small businesses and those who are self-employed,” said David Luck, chief executive of Capital on Tap.
“It is important to us to make that process easier during this challenging situation.
“A large portion of our customer base are sole traders and would need additional financial support from the government due to lost work.
“Our focus has been on what we can do to support our customers, whether that’s through initiatives like Covid Credit, or providing information on other government schemes like those that provide business rate relief or grants.
“At the moment, Covid Credit is a proof of concept, but there has been an amazing level of interest already with thousands of people joining the waiting list.”
The concept arose as part of a discussion in the fintech community over how best to provide support to millions of customers.
Although the government has announced that the self-employed will be eligible for up to £2,500 per month, this is not due to start until June.
The aim is that the Covid Credit product will help the government to manage the applications they receive from sole traders, to ensure businesses at risk receive support as quickly as possible.
The Covid Credit system is one of several ways that Capital on Tap is working to assist its customers and small businesses.
Other measures the company has taken include hiring additional staff in the customer service centre, and applying to become an accredited lender of the coronavirus business interruption loan scheme.