ThinCats has urged the government to extend the application deadlines for both the coronavirus business interruption loan scheme (CBILS) and the coronavirus large business interruption loan scheme (CLBILS).
In a letter to Chancellor Rishi Sunak, the alternative lender – which has been accredited to deliver both schemes – called for the government to extend CBILS from its application deadline of 30 September and CLBILS from its application deadline of 4 November, to Spring 2021.
ThinCats has previously called for the extension of CBILS, but has now included CLBILS in its recommendations too.
ThinCats said extending the two schemes will help many businesses which have enough cash to survive in the short-term but may need additional working capital and growth capital beyond September.
With continuing economic uncertainty, the financial impact of winding down the furlough scheme, and the possibility of further lockdowns, lenders may be cautious about lending without some element of government guarantee, ThinCats added.
“Without doubt the government schemes to support SMEs during the Covid-19 pandemic have been incredibly helpful,” said Ravi Anand, managing director of ThinCats, in a blog on the lender’s website.
“However, from speaking to our borrowers, many are moving from rescue phase into recovery and these businesses are beginning to look for second stage funding for growth and working capital.
“At the moment, many businesses, especially those who borrow based on cashflow, are not yet operating at pre-Covid-19 levels.
“Without the partial government guarantee provided by the schemes, it becomes difficult for banks and other lenders to support these businesses. There is a risk of creating a liquidity squeeze at the very time when businesses can see a way forward.
“The opportunity exists to provide some longer-term certainty to businesses by continuing to encourage lenders to provide funding, which is why we are urging the government to extend both schemes to the end of the financial year next April.”
ThinCats, which exited the retail peer-to-peer lending market in favour of institutional funding last year, was accredited for CBILS at the end of April, and for CLBILS in June, joining other alternative lenders approved for both schemes such as OakNorth Bank.
The lender isn’t alone in calling for a CBILS extension, with P2P lending platform Folk2Folk also urging the government to extend the scheme.
While the government has not publicly announced extensions to any of the schemes, the British Business Bank has extended the deadline to consider and process loans received by the application deadline of 30 September, to 30 November.