Peer-to-peer lending platform ArchOver has called for more alternative finance lenders and fintechs to be accredited to deliver the government’s Coronavirus Business Interruption Loan Scheme (CBILS).
CBILS provides an 80 per cent government guarantee on loans to small- and medium-sized enterprises (SMEs) with turnover of up to £45m. So far, Funding Circle and Assetz Capital are the only P2P lenders accredited to provide the scheme.
ArchOver highlighted that the problems with CBILS lie in its capacity and speed in which the scheme is delivered.
As of 12 May, the government-owned British Business Bank had delivered 36,000 loans worth over £6bn through CBILS, but according to UK Finance figures, as of 6 May just over half of the applications received for the scheme were approved.
ArchOver has suggested that accrediting more fintechs and non-traditional lenders to CBILS will help increase the amount and reach of available capital.
With banks under fire for their slow pace of distributing funds, fintechs can be more agile in delivering finance, ArchOver said.
“To date, only a small number of fintech or alternative lenders have achieved CBILS approval but assembling a broader church of lenders to deliver this funding will be crucial over the coming weeks,” ArchOver said in a blog on its website.
“An opportunity exists for the British Business Bank to improve the efficiency of this well-intentioned scheme, whilst a parallel one is there for fintechs to prove their value to the financial system in a time of real market stress.”
“If these chances are taken, perhaps a positive story can emerge from this.”