British Business Bank (BBB) chief executive Catherine Lewis La Torre has acknowledged that the government’s emergency lending schemes have displaced alternative lenders but insists they will return.
The BBB has been in charge of facilitating state-backed emergency lending such as the coronavirus business interruption scheme (CBILS) and faced criticism last year over how long it took alternative lenders to get accredited to provide the finance.
Funding Circle became the first peer-to-peer lender to become accredited in April 2020 and was followed by Assetz Capital, Folk2Folk and LendingCrowd.
A report from the BBB last week warned that borrowers who would usually seek support from P2P lenders had instead gone to CBILS providers.
Speaking during an Innovate Finance webinar on Tuesday, Lewis La Torre (pictured) said the emergency lending schemes had altered the wider market for finance.
“Undoubtedly there has been some displacement, it would be wrong not to acknowledge that,” she said.
“We worked hard to accredit a broad range of providers to finance the market.
“We also know the UK market is very concentrated on the lending side with the big five lenders.
“That was something we were concerned about in the process.
“There has definitely been a displacement but we think it will come back, as we move to the recovery loans scheme, it will be a different set of circumstances.”
She added that businesses would now be more informed about where they can find external finance as many would have been seeking support for the first time during the pandemic.