JustUs plans to launch its Small Business Interruption Loan Service (SBILS) by the end of August and has called for the government to take part and lend alongside the crowd.
On 13 July, the peer-to-peer lending platform announced it will use its technology to launch a platform aimed at businesses which are not eligible for the government’s emergency loan schemes.
Firms can download the Moneybrain app – a sister brand of JustUs – to apply, and following a review, if a request is successful the SBILS team will help the business build a loan request campaign.
Lee Birkett, founder of JustUs, said the first crowdfunding campaigns will be live before the end of August because the government’s coronavirus business interruption loan scheme is due to end on 30 September.
“Something needs to come in and replace it,” he said.
Birkett said he has already received hundreds of applications for the scheme but unfortunately only about five per cent of people investing through SBILS will be successful because it is crowdfunding through friends and family, which is limits the number of people who can get involved.
He added that government guarantees would have helped the platform deliver more funds to businesses.
However, Birkett said JustUs was unable to participate in the government’s emergency loan schemes partly due to its exclusion of retail investors. He added that the government has declined to participate in SBILS.
“With government capital we would have been able to help 90 per cent of people rather than five per cent, but we have to do something,” he said.
“It’s going to be a shocking 12 months ahead which is why need capital flowing urgently from the government and that’s why we invited the government to lend alongside the crowd on SBILS, but they’ve declined at the moment.
“Everyone knew the government wasn’t able to get money out unless they engaged with fintechs and they haven’t done so.
“Our retail investors are increasing their appetite so it’s crazy the government is only permitting institutional investment for government emergency loan schemes when appetite for retail is out there.
“We built a platform for those excluded from the schemes and had to build an app that does all the onboarding of customers, using the same technology of Starling Bank and Tide.”
Sole traders can open a Moneybrain account now and by the end of the week, limited companies will be able to as well, Birkett added.
“A lot of sole traders want to create limited companies to access the schemes but can’t even open a bank account, because most can’t open business accounts at the moment, it takes up to 12 weeks,” he said.