Folk2Folk aims to take part in the government’s future lending scheme next year which will replace the coronavirus business interruption loan scheme (CBILS).
In September, the Treasury announced it was staring work on a new, successor loan programme, set to begin in January 2021.
Folk2Folk, which was accredited for CBILS at the start of July and has been preparing for lending under the scheme since then, hopes to use its work preparing for CBILS lending to participate in a replacement scheme.
“Having already gone through the British Business Bank’s due diligence and a third-party audit, if a future government lending scheme fits our style of lending, we’d be delighted to participate and play our part in helping British businesses access the finance they need,” a spokesperson from Folk2Folk said.
The rural business peer-to-peer lending platform is still hopeful it will lend under CBILS before the scheme closes for applications at the end of the year.
Folk2Folk has passed the British Business Bank’s due diligence and a third-party audit and has partnered with German debt marketplace Crosslend to raise the institutional funding needed.
The platform is currently working on moving forward with an institutional relationship and is also talking to Crosslend about more institutional partnerships.
CBILS was originally set to close for applications on 30 September. However, the Treasury extended the scheme to the end of the year, giving the platform more time to prepare and potentially lend CBILS loans.
“We’re hopeful of conducting some CBILS lending, given the extended deadline, by the end of the year,” the Folk2Folk spokesperson said.
“Everyone at Folk2Folk is doing what we can to deliver that, but it is not within our control. Things are moving in the background, but we haven’t been able to move onto the next stage of lending under the scheme.
“We’re still in the stage of operationalising the investment side of the CBILS loans and are being transparent with borrowers about where we are because we don’t want them to be reliant on us for a CBILS loan in the event we aren’t able to make the deadline.”
As well as preparing for CBILS lending, Folk2Folk said that its priority remains its core business.
The platform said its business has returned to pre-lockdown levels and it anticipates October to be its busiest month of the year in terms of loan completions.
A spokesperson from Folk2Folk said the platform has received increased interest on the borrower side from councils and a law firm, on behalf of businesses seeking alternative finance.
“They are asking us, at the request of businesses, what finance is available and where they can access it,” the spokesperson said.
“So, even though we’re not able to do CBILS loans yet while we’re waiting for our institutional investor, we are seeing successes in our core lending business.”
Folk2Folk has also been busy securing new institutional investors. In August, Dean District Council became the second council to commit to back P2P loans through Folk2Folk.
This followed a busy lockdown period for the platform, in which it facilitated more than £17.3m in loans to small– and medium-sized enterprises during March, April and May.