Proplend is planning to launch a coronavirus business interruption loan (CBIL) Innovative Finance ISA (IFISA), if its application to become an accredited lender for the scheme is successful.
The peer-to-peer property lender has applied to the British Business Bank to join the coronavirus business interruption loan scheme (CBILS), which provides government-guaranteed loans to small businesses via accredited lenders amid the pandemic.
Proplend said the coronavirus business interruption loan (CBIL) IFISA would benefit small- and medium-sized enterprises (SMEs) who need cash and investors seeking income. Proplend said once approved, the IFISA would be operational within 48 hours.
“Borrowers need the money and the investors are looking for returns,” said Brian Bartaby (pictured), founder and chief executive of Proplend.
“If this is approved the CBIL ISA is a sensible idea because the cash would be deployed to SMEs who need it and that cash would be funded by ISA investors who would benefit from the government guarantee of the loan.
“Given the current situation with bank rates at 0.1 per cent anyone with money in cash ISAs are not earning much in returns.
“And I think banks just have not got the ability to cope with the huge number of applications in such a short space of time, whereas this is exactly what financial technology platforms were built for.
“The government has backed financial technology businesses and the Financial Conduct Authority has created a regulatory environment for them to work in.
“The UK has some of the best fintechs in the world. We’ve been sitting on our hands while we could be helping out, that’s exactly what we were built for.”
Proplend would issue loans ranging between £250,000 and £3m, on a term of up to three years.
The loans would be secured against property, with a 50 per cent loan-to-value (LTV), as well as the government’s 80 per cent guarantee.
The CBIL IFISA will have a minimum investment of £1,000 and investors will earn fixed monthly interest.