Eisenhans - Fotolia

Fintechs ramping up efforts to get loans into SME hands

With the deadline for the government-backed coronavirus loan scheme looming, efforts are being made to try to get those small firms looking for financial aid logged onto the system

Financial technology (fintech) specialists Ebury and MarketFinance have teamed up to try to get government funds to as many small and medium-sized enterprises (SMEs) as possible before support schemes end in a couple of weeks.

Not that long into the pandemic, the Chancellor of the Exchequer, Rishi Sunak, used his March budget to launch a temporary coronavirus interruption loan scheme (CBILS), which would give small firms a chance to access up to £5m from banks, with 80% of that guaranteed by the government, to help businesses that are facing cash-flow problems.

According to the most recent government figures, from mid-August, there have been more than 900 applications and almost 600 approved, with £588m worth of convertible loans approved.

The CBILS scheme is due to finish at the end of this month, but with coronavirus rates rising and the pressures on most small firms remaining high, there are efforts being made to ensure as many SMEs as possible can get access to the support before the curtain comes down.

Although the scheme winds up at the end of September, those with pre-submitted applications have until the end of November to get the funds through, and there is an opportunity to get a CBILS loan between £50,001 and £150,000 with no fees, interest or repayments for 12 months right up until the 30 September.

Juan Lobato, Ebury CEO, said that it had teamed up with MarketFinance to make sure that it could offer both its CBILS loans and revolving credit facilities to its SME base.

“That deadline is fast approaching, so nimble UK fintechs Ebury and MarketFinance have combined to tackle the delays that have left some UK SMEs without access to finance,” he said.

“International trade specialist Ebury will add MarketFinance’s CBILS loans and revolving credit facilities, which are both interest free for the first year, to its existing supplier trade finance products, meaning clients can access a comprehensive range of working capital solutions.”

Over at MarketFinance, the view from CEO Anil Stocker was that partnerships had proved to be a key way to reach a wider customer base.

“We hope this partnership will make it even easier for business owners to find the right finance to help them through this global pandemic,” he said.

The tie-up also means that although the focus for the next few weeks will be trying to help SMEs get access to CBILS loans, there are prospects for them to tap into other finance options after that window had closed.

Business groups, including the Federation of Small Business (FSB), have called throughout the pandemic for clear and sustained support for SMEs. Those calls have only intensified as local lockdowns have made life even more difficult for some of its members.

SMEs that were forced to close their doors because of local lockdowns are being provided government grants worth up to £1,000 every three weeks they have to remain shut.

FSB national chairman Mike Cherry said that providing assistance during the pandemic had been an “additional financial lifeline to those most harmed”, but the system needed to be straightforward to make it easy for firms to apply for support.

Read more about CBILS

Next Steps

What solution providers must know about fintech companies

Read more on Finance and Credit