UK lenders call on government for £5bn to help SMEs before month end

Written by Ruby Hinchliffe
24th April 2020

A group of 166 British lenders led by WorldPay’s founder Nick Ogden, ClearBank and Funding Options has called on the UK government to provide £5 billion government funding to small and medium-sized enteprises (SMEs) amid coronavirus.

Together, the consortium of fintechs say they can help 33,000 UK businesses receive liquidity in the “critical days before end of month hardship”.

The firms would focus on small businesses which need up to £150,000 to help fix their immediate cash flows.

“We need a specific distribution channel to serve thousands of small businesses,” says Ogden

Lenders involved in the call to government include Just Cash Flow, Credit4, Invocap, Merchant Money and Fleximize.

As of 17 April, just £1.1 billion of £330 billion SME loans in the Coronavirus Business Interruption Scheme (CBILS) had been granted.

Just £2.8 billion of the £330 billion allocated to SMEs by UK Chancellor Rishi Sunak has reached small businesses.

“The consortium has been set up to open access to lending, make it easier to onboard businesses and facilitate fund delivery,” the group of lenders said in statement.

“We have built a fully regulated structure that can uniquely support the government”

Whilst ClearBank will be able to onboard regulated businesses and facilitate fund delivery, Funding Options will provide access to appropriate lenders. Businesses can access the scheme via Business.co.uk.

The group is welcoming all UK lenders to join the effort to keep British SMEs afloat.

“We need a specific distribution channel to serve thousands of small businesses and this can only be achieved through a consensus approach,” says Ogden.

“Via this consortium we have built a fully regulated structure that can uniquely support the government who are trying to find a way to fix this problem. We’re ready to go.”

Funding Options’ CEO Simon Cureton says he saw a demand for £1.7 billion in loans throughout March, but much of that demand “remain[s] unfulfilled as a consequence of the reduction in market liquidity”.

Cureton adds to the pressure already on UK Chancellor Sunak to offer 100% government-backed loans, which he says would “remove the liquidity block that exists in the market today”.