JustUs has opened applications for its Small Business Interruption Loan Service (SBILS) to provide funding for businesses that missed out on finance under the coronavirus business interruption loan scheme (CBILS).
Prospective borrowers can download and apply for the scheme on the Moneybrain app, a sister brand of JustUs. They can then list their business and raise money through crowdfunding, which the company starts repaying a year later.
This is similar to the breathing room CBILS provides where borrowers pay back nothing for the first 12 months, with the government paying the upfront fee and first year of interest.
Lee Birkett, founder of JustUs, who came up with the idea for SBILS in July, and originally planned to launch it by the end of August, said he has already received millions of pounds worth of applications.
He hopes that the government will support the scheme alongside the crowd.
Birkett said he does not expect SBILS, which has fixed rate, to come into full effect until the government’s support schemes comes to an end.
CBILS closes for applications at the end of the month and the application deadline for the bounce back loan scheme (BBLS) is 4 November.
“We’re encouraging companies to get their customers, suppliers, family and friends to come together if they believe in the business, and lend them money,” Birkett said.
“We’re providing a platform to make it happen, crowdfunding for a business everyone believes in, whether it’s a local pub or rugby club or a favourite restaurant.
“We’re taking applications now and preparing for until the government can confirm its CBILS and BBLS have finished, as businesses would rather get the money free from the government.
“Rishi Sunak does not seem to be doing a U-turn on the end of CBILS so SBILS will come into own from 1 October. In my mind October will be rebirth of P2P. Banks will stop lending without the government guarantee and P2P will be needed 10 times more than the last credit crunch.”
Birkett said JustUs saw its application for a CBILS loan rejected and SBILS will help the many businesses excluded from CBILS, with only about half of firms that applied to the scheme approved for funds.
“We weren’t able to access government support,” he said.
“We tried to get a CBILS loan, but because we’re a fintech business and supported by equity we carry natural losses as do most new businesses, and if you carry losses you can’t access that support.”