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
funding
July 27 2020

Institutional funding drought hits CBILS participation

Michael Lloyd Industry News, News, Top 3 Andrew Holgate, Assetz Capital, Bounce Back Loan Scheme, Covid-19, Equitivo, Stuart Law, the coronavirus business interruption loan scheme

Some alternative finance platforms may be unable to participate in government emergency loan schemes due to a shortage of institutional funding, industry stakeholders have warned.

Andrew Holgate, chief executive of fintech consultancy Equitivo said that Covid-19 caused institutional funding to dry up, and now institutions are losing appetite for government emergency loan schemes.

Read more: What CBILS deals are alternative lenders offering?

“A lot of big institutions were prepared to put money into some of these platforms a few months ago with the government guarantees in place from the British Business Bank, but that seems to have dried up a little,” said Holgate.

“This was partly due to the actual understanding of how guarantees work and there’s questions around the actual strength of these portfolios being built.”

For the cost of capital to participate in the bounce back loan (BBL) scheme and deploy these loans, platforms would need access to cheaper money from the Bank of England’s Term Funding scheme, Holgate added.

Earlier this month it was reported in the Sunday Times that large banks had blocked non-bank lenders, including P2P lending platforms, from having access to this scheme.

Stuart Law, chief executive at Assetz Capital, which was approved to participate in the scheme in May, said that to attract institutional capital for CBILS, platforms have to be at a certain size and scale.

Law said he has noticed more interest from institutional investors for the government’s emergency loan schemes but most of these have been from prior relationships.

He added that if institutional lines are not already in place now it would be too late to start any substantial lending under CBILS before the scheme is set to end on 30 September.

Read more: ‘Skin in the game’ requirement for CBILS may be hurdle for P2P lenders

“It requires substantial track record and scale in existing good-quality small- and medium-sized enterprise lending, as well as due diligence by the institutions, already mostly completed or completed, due to the short-time frame before CBILS ends in September,” he said.

Law has called on the government to extend the loan scheme in order to give lenders more time to attract the investment needed to deliver these funds.

Fintech investment slows, but appetite is still there Linked Finance bids for inclusion in Irish credit guarantee scheme

Related Posts

funding to businesses

Industry News, News, Top 3

Government to launch replacement future fund scheme

money UK

Industry News, News, Top 3

BBB sets out further details on recovery loan scheme

Forensic Expert Pressing TASK FORCE

Industry News, News, Top 3

Treasury launches £100m Taxpayer Protection Taskforce

Popular posts:

  • The House Crowd goes into administration
  • Chancellor unveils recovery loan scheme
  • Budget outlines plans for £15bn of green bonds in 2021
  • Sunak to announce stringent CBILS successor scheme
  • FCA warns The House Crowd investors against using…
  • Octopus Choice has permanently closed
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