Peer2Peer Finance News
The UK's first peer-to-peer finance magazine for investors and the industry
  • Home
  • News
    • Personal Finance News
    • Industry News
    • SME News
    • Global News
  • Property
  • IFISA
    • IFISA Guide
  • Video
  • Open Banking
  • Cryptocurrency
  • Features
    • Joint Ventures and Promoted Content
  • Comment & Analysis
  • What is P2P?
  • Partners
  • Events
    • Past Events
  • P2P Power 50
    • Power 50 2020
    • Power 50 2019
    • Power 50 2018
    • Power 50 2017
  • Sign up to our e-newsletters
  • Magazine
  • Directory
  • Jobs
  • My Account
    • Manage Account
    • Change Password
    • Log In
    • Log Out
National Bank of Switzerland in Bern
April 21 2020

Chancellor urged to look to Switzerland for CBILS improvement

Michael Lloyd Industry News, News, Top 3 coronavirus, coronavirus business interruption loan scheme, Covid-19, eacs, Rishi Sunak, Roger Frye, Switzerland

The Chancellor Rishi Sunak should introduce something similar to Switzerland’s emergency scheme for businesses impacted by Covid-19, managed services provider eacs has claimed.

Roger Frye, finance director of eacs, said this is because banks are failing to deliver the coronavirus business interruption loan scheme (CBILS) to small and medium-sized enterprises (SMEs).

The Swiss scheme comprises of two main elements. The first enables businesses to apply for an immediate loan worth up to 10 per cent of their annual revenues, capped at SFr500,000 (£400,000).

This is interest free and provided by the Swiss banks, which are underwritten with a full credit guarantee on the amount by the Swiss government. To apply all you need is a simple declaration.

The second loan facility is up to SFr20m (£16.5m). The Swiss government guarantees 85 per cent of the loan, charged at 0.5 per cent interest. The bank assumes risk of the last 15 per cent, charged at a competitive rate.

Read more: P2P industry urges faster roll-out of Covid-19 loans scheme

“To say that the UK scheme is patchy is an understatement and we are adding our voice to calls for the chancellor to look to Switzerland to see how successful support for SMEs can be,” said Frye.

“As it is run through the existing banking network and its customer relationships, the authorities were able to roll out the scheme almost overnight.

“Barely any new infrastructure was needed, and banks already had the necessary credit history and data on their clients. Why on earth would we not do the same?”

Read more: Use bank referral scheme to speed up emergency SME loans

Frye criticised UK banks for wanting the submission of management accounts, cashflow projections, historic reports and accounts, and even details on assets, making the already complex process more time-consuming.

CBILS is being run through some 40 accredited lenders, however Frye highlighted that according to The Sunday Times, the majority of loans are being facilitated by just two lenders, NatWest and HSBC.

Read more: Advisory experts question efficacy of coronavirus loan scheme

“The resultant approach being taken by UK banks is less than supportive, in fact one could argue that the risk adverse culture is as strong as ever,” said Frye.

“It is absolutely clear that the current government coronavirus loan scheme needs review.

“We would argue that the government needs to guarantee 100 per cent of the loan, making banks more of a delivery mechanism for grants as opposed to playing the traditional role of credit gatekeeper.

“The SME sector needs support – it is the powerhouse of the UK economy and will be crucial to the economy rebound post-Covid-19.”

Money&Co completes £1m of litigation finance and £400,000 music loan Listed companies face calls to include retail investors in their fundraising

Related Posts

Businessman separates the wooden puzzle with a picture of money. The concept of financial management and distribution of funds. Saving and investing. Property division. Legal services.

Industry News, News, Property, Top 3

50pc of the Octopus Choice portfolio has already been realised

Andrew Bailey

Industry News, News, Top 3

BoE’s independent directors back Bailey over LCF collapse

Rhydian_Lewis5122_RateSetterLogo

Industry News, News, Top 3

RateSetter confident of growing Metro Bank’s unsecured lending

Popular posts:

  • Funding Circle strikes another CBILS securitisation
  • How the government distorted the P2P market
  • RateSetter to stop investment withdrawals from 26 March
  • FCA puts the brakes on Buy2Let Cars
  • Assetz promises a return to manual lending within months
  • How to invest in an IFISA with £100 or less
Back To Top
  • Home
  • Contact
  • About
  • Team
  • Advertising
  • Subscribe
  • Privacy
  • T&Cs
  • Disclaimer

Follow Us on Social Media

© Peer2Peer Finance News 2020
• Additional design by