Funding Circle becomes first lending marketplace to issue UK CBILS grants

Written by Ruby Hinchliffe
20th April 2020

Funding Circle, the UK-founded peer-to-peer lending platform, has become the first loan marketplace to become accredited under the Coronavirus Business Interruption Scheme (CBILS).

The lending marketplace says it will fund the loans itself alongside new and institutional investors

Authorised by the British Business Bank (BBB), Funding Circle expects to open CBILS applications within the next week once it completes legal and operational approvals with the BBB.

Designed to help small and medium-sized businesses survive the coronavirus, the CBILS allows the government to underwrite 80% of the loan value, which can be as much as £5 million as long as the business’ revenue is under £45 million.

The lending marketplace says it will fund the loans itself alongside new and institutional investors.

“Funding Circle will be able to provide more capacity, more choice and most importantly, vital funding for smaller businesses across the UK,” says the BBB’s CEO Keith Morgan.

The fintech, which says it has already originated more than £6.2 billion in loans to more than 57,000 businesses, has also been accredited by the US equivalent of the CBILS – the Small Business Administration’s (SBA) Paycheck Protection Programme (PPP) – to issue loans to small and medium businesses which are 100% government backed.

In the UK, the BBB accredited four new UK lenders for the CBILS last week, which included Co-Operative Bank, OakNorth Bank, Starling Bank, and Cynergy Bank.

These approvals for lenders and marketplaces come as the government is under immense pressure to distribute loans faster to small businesses. A total of 6,020 loans worth £1.1 billion had been issued under the CBILS as of last Tuesday.

UK Finance said 21% of the 28,460 formal CBILS applications had been approved, but it’s understood more than 300,000 firms have informally inquired about getting help from the scheme.