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Status of Lending in the UK

Now, more than ever, businesses are seeking financial support. Here we will keep you updated on the changing UK lending market. 

Oliver Cummings Apr 14, 2020

With over 360 lenders in the UK, only 40 can offer the Coronavirus Business Interruption Loan Scheme (CBILS), this update takes a closer look at the non-CBILS lenders.

For information on Coronavirus Business Interruption Loan Scheme, see our recent post What are CBILS loans? Here we explore what the loan is, who is eligible and how you can apply on the Capitalise Platform. 

 

The UK lending market

Acceptance, interest rates and security
 

No longer business as usual 
 



Additional information needed


Underwriting criteria tightening 


Offers are not guaranteed 

 

Security is a must

 

Revenue Lending

Many sectors are off the table

Why are lenders so affected?
 

The economic contraction from Covid-19 and the government’s groundbreaking support packages, mostly notable the Coronavirus Business Interruption Loan Scheme (“CBILS”) run by the British Business Bank, will have a large impact on the current lending environment.

Regular lending will, in the UK, be hit by a demand-side shock, impacting business cash flow, and affecting the quantum of lending that will surpass their underwriting criteria. In addition to this, they will lose their competitive position as CBILS lenders’ supported interest holiday will make their facilities cheaper and more attractive. This, therefore, will allow the CBILS lenders to 'cherry-pick' the best and most secure businesses.

Non-CBILS lenders will have to balance these factors and make underwriting policy decisions which may have great consequences for their own businesses. 

These lenders are lending. Affordability and security will be key - there will be a higher level of scrutiny through the credit process. Sectors such as travel, retail and hospitality are already facing restrictions, but there are solutions if SMEs and their advisers are nimble.

Capitalise works with over 100 lenders and we'll keep adjusting our lender criteria to maximise acceptance rates as policies change. We are receiving updates from all our partners in banks, challenger banks, alternative lenders and the fintechs to help you understand what is happening day by day, minute by minute.

 

What can you do to help your clients
 

At Capitalise, we are constantly monitoring our 100 plus lenders and making sure we have the latest information from each lender. This can change day by day, however, our Covid-19 Business Support Hub will keep you updated on the latest information.

We can introduce you to a wider market and quickly, with your help we can find your clients the funding they need to continue if this is available in the market. If the funding is available in the market, we will know.

Complete a funding search through the platform as usual and your partnership manager and our funding specialists will help you every step of the way.

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