Ablrate chief executive David Bradley-Ward has written to the chancellor, urging him to take action against banks not approving enough coronavirus business interruption loan scheme (CBILS) applications.
Bradley-Ward (pictured), who heads up the asset-backed peer-to-peer lender, said that a huge proportion of businesses are not receiving funding from banks under CBILS and this will result in millions becoming unemployed.
So far lenders have approved just over 50 per cent of CBILS applications for small- and medium-sized enterprises (SMEs), although this figure has risen from 47.8 per cent the previous week.
The government guarantees 80 per cent of a loan’s value under CBILS. It recently introduced another emergency funding measure – the Bounce Back Loan scheme – which offers a 100 per cent guarantee to small firms for loans of up to £50,000.
Bradley-Ward has predicted that the introduction of the new scheme will result in banks rejecting larger loan applications under CBILS in favour of issuing smaller loans that have a 100 per cent government guarantee.
Bradley-Ward has called for Chancellor Rishi Sunak to threaten to pull the licenses of banks if they are not approving CBILS loans proportionate to their size.
“This is the biggest act of piracy I’ve ever seen in my entire life,” he said.
“Businesses that need funding will not get it. More will die from the economic fallout than from Covid-19. It’s a scandal and there will be utter chaos if this government cannot sort this out.
“Rishi Sunak doesn’t understand SME lending. I’m calling for him to pull the license of banks not lending proportionate to their size. We’re in a crisis and he needs to get tough.
“It’s the banks who screwed everyone in 2008 and are trying again. After this I think legacy banking system could be in trouble.
“I think there will be calls for nationalisation of the banking system after this crisis. I’d have laughed at that suggestion months ago.”
Bradley-Ward has backed Peer2Peer Finance News’ ‘Back Our Industry’ campaign, urging the government to utilise P2P platforms during the Covid-19 pandemic.
“I would say we all need to work together in this time to help our industry and all our customers,” he said.