Alternative loanDigital Banking

Applications for loans of between £ 2,000 and £ 50,000 will be opened today.

Image source: Anne Boden / Starling Bank.

Highstreet banks Barclays, Lloyds and NatWest are one of the first eight accredited lenders that have been approved to offer loans under the Bounce Back Loan Scheme of & # 39; e government, but at least one fintech is expected to join the & # 39; list, as applications open today.

The government scheme is designed to help small businesses affected by the coronavirus crisis and was launched after complaints that businesses have difficulty getting credit under another government aid program, the Coronavirus Business Interruption Loan Scheme (CBILS), designed to help businesses survive the Covid 19 shutdown.

Barclays, Lloyds, NatWest, Santander, RBS, Ulster Bank, Danske Bank and Clydesdale & Yorkshire Bank have been named as the first eight accredited lenders by the British Business Bank.

Starling Bank is expected to join the list of accredited lenders in the coming days.

Last week, Starling said: "The government has said that they will provide full details of the scheme on Monday, May 4. As an accredited credit finder CBILS, Starling will offer loans under the Bounce Back scheme."

"We will be publishing more details and a way to register for this scheme soon. Starling Bounce loans will be available as soon as possible after May 4."

Funding Circle, which is also accredited under CBILS, also hopes to join the Bounce Back Loan scheme, it is understood.

However, other alternative lenders that are not accredited under CBILS, such as OakNorth, ThinCats and Paragon, are not expected to participate in the Bounce Bank Loan scheme.

The companies that can borrow through the new scheme are the ones that are accredited by the British Business Bank to lend through the CBILS, which, unlike the Bounce Back Loans scheme, State guarantee of 80 percent has on loans.

It is understood the process of accreditation for the Bounce Back Loan scheme began with the big banks, with later and smaller lenders following.

The scheme, which offers loans between £ 2,000 and £ 50,000, is 100 percent guaranteed by the government.

The loan is interest-free for the first year, with rates of 2.5 per cent per annum after the first 12 months.

Access to the loans, available through the accredited lenders, are open today from 9am, and government ministers hope the system will be easy and quick to use with a simple seven-question application form.

The CBILS scheme, which provides loans of up to £ 5 million for companies with a turnover of less than £ 45 million, has come under criticism by some companies, especially smaller ones, for problems in obtaining loans.

Last week, the number of agreed loans under CBILS was 8,638, down from more than 9,000 the previous week.

Max Chuard, CEO, Temenos, the banking system company, believes that those banks with the most fleet of foot technology can provide the most efficient service.

"The launch of the loan scheme & # 39; bounce back & # 39; of the government could not come soon enough for small businesses whose living conditions are shortened by the COVID-19 pandemic," he said.

"Unlike its sister scheme, CBILS, the new program promises fast track financing for businesses in need and provides access to cash & # 39; within days & # 39; However, its effectiveness will greatly depend on whether UK banks are provided with & # 39; # 39; the right technology to be able to handle this unusual and increasing demand for fast finance. "

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