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
Houses of Parliament with Big Ben and double-decker bus on Westminster bridge at sunset, London, UK
September 25 2020

New questions raised around emergency loan scheme extension

Kathryn Gaw Industry News, News, Top 3 CBILS, Gregory Taylor, MHA MacIntyre Hudson

Financial experts have raised new questions around the government’s recently-announced extension to the emergency loan schemes.

Accountancy group MHA MacIntyre Hudson has pointed out that just 49 per cent of applications under the coronavirus business interruption loan scheme (CBILS) have been approved, suggesting that many small- and medium-sized enterprises (SMEs) are unable to access the funding they need to support their business through the pandemic.

While there is a 63 per cent approval rate across all four of the government’s emergency loan schemes – the coronavirus large business interruption loan scheme (CLBILS), CBILS, the bounce back loan scheme, and the future fund – this figure is skewed by the 82 per cent approval rate at the bounce back loan scheme.

Read more: Government unveils changes to emergency loan schemes

“Of the four Covid-19 loan schemes, only the bounce back scheme is particularly effective at getting help to where it is needed,” said Gregory Taylor, head of financial solutions at MHA MacIntyre Hudson.

“For the other schemes lending practices are too restrictive, and even good companies with solid growth prospects can’t get a look in.

“One of the best moves government could make to increase approval rates would be to allow banks to make loans at four times a company’s EBITDA,” he added.

“This is the tolerance non-bank lenders employ, and would allow many more businesses to benefit. Banks are currently only making loans up to a value of 1.7 times EBITDA, so many businesses are missing out on the support they need.”

Taylor also pointed out confusion around the six-month freeze on loan repayments which was announced yesterday (24 September).

“Who gets to decide whether this is allowed, the lender or the British Business Bank?” he asked.

Taylor’s queries follow criticism that an extended term time would hurt those peer-to-peer lending platforms which are authorised to offer CBILS loans. While banks can access wholesale lending facilities via the Bank of England’s term lending scheme, alternative lenders are currently restricted to raising funds via institutional investors.

Read more: Assetz Capital resumes retail lending

First secondary market trade of litigation funding assets completes A timeline of FCA oversight and job changes

Related Posts

Young african american shopkeeper woman wearing medical mask working at clothing store

Industry News, News, Top 3

Fintech sector showed resilience during Covid-19

nikhil-rathi-high-res

Industry News, News, Top 3

Nikhil Rathi unveils new hires amid FCA restructure

Auditor with magnifying glass checking financial report.

Industry News, News, Top 3

Kalifa review to call for independent fintech body

Popular posts:

  • Funding Circle strikes another CBILS securitisation
  • How the government distorted the P2P market
  • RateSetter to stop investment withdrawals from 26 March
  • Metro Bank plans to offer RateSetter lending through…
  • FCA puts the brakes on Buy2Let Cars
  • RateSetter confident of growing Metro Bank’s…
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