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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
Details are due to be shared from the banks in w/c 23rd March 2020. Once this has been confirmed we will be able to update you on the process.
Our panel of lenders are now asking for additional information. These include:
Details are due to be shared from the banks in w/c 23rd March 2020. Once this has been confirmed we will be able to update you on the process.
Lenders are increasing their debt service coverage ratios. They are also reducing their appetite for refinancing existing debt.
Details are due to be shared from the banks in w/c 23rd March 2020. Once this has been confirmed we will be able to update you on the process.
If businesses have an existing offer from a lender - these are at risk of being withdrawn by lenders. Whilst, typically lenders would hold these open for 30 days, we are seeing that lenders are reviewing their open offers and in some cases rejecting them.
iwoca have moved to 7 days and ESME to 14 days. We have also seen lenders pull offers entirely.
Details are due to be shared from the banks in w/c 23rd March 2020. Once this has been confirmed we will be able to update you on the process.
Our panel has also been moving offers away from unsecured lending backed by Personal Guarantee to fully secured. Market Finance have pulled out of unsecured loans and are focusing on their core invoice finance offering.
Details are due to be shared from the banks in w/c 23rd March 2020. Once this has been confirmed we will be able to update you on the process.
Our MCA panel has reduced the amount of debt they are willing to lend given their repayment is based on revenue through the merchant card terminal - in some cases, now this is zero.
Details are due to be shared from the banks in w/c 23rd March 2020. Once this has been confirmed we will be able to update you on the process.
Most lenders are not lending to the travel and leisure sector but we have now seen this loss of appetite for other business sectors heavily impacted by social distancing. These include:
Details are due to be shared from the banks in w/c 23rd March 2020. Once this has been confirmed we will be able to update you on the process.
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.
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.
Olly brings a wealth of experience to Capitalise - he is a trained accountant (Ernst & Young), an ex-banker (Smith & Williamson, HSBC), an ex Venture Capitalist (Nauta Partners) and more recently helped establish and scale the partnerships team at MarketInvoice, the invoice financing business. He is passionate about helping small businesses get the funding they need, and is a mentor at several small business accelerator programs.
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