Everything we know about the CBILS successor scheme (so far)
It was back in September when Chancellor Rishi Sunak first announced that the Treasury was planning to introduce a successor scheme to the current Covid-19 support loans.
When announcing the extension of the coronavirus business interruption loan scheme (CBILS), bounce back loan scheme and coronavirus large business interruption loan scheme, he said the Treasury was starting work on a new, successor loan programme, set to begin in January 2021.
Then in December the current schemes were extended until 31 March 2021.
Here Peer2Peer Finance News reveals what we know so far about the new scheme and which P2P lending platforms have expressed interest in taking part.
What we know so far
Stuart Law, chief executive of Assetz Capital, which was the second P2P lender accredited for CBILS, has previously said that he believes a replacement scheme without the first year of the government paying the fees will likely replace CBILS when it ends.
The British Business Bank has told Peer2Peer Finance News that it is in discussions with the government, trade associations, lenders and other stakeholders on the future design of the new scheme.
Mike Carter, head of platform lending at the 36H Group, said the trade body is working to ensure non-bank lenders play an important role in the successor scheme.
“The successor scheme will be crucial in providing businesses with a range of funding options to meet their needs, as this economic downturn is projected to continue well into 2021,” he said.
“Our work with government will ensure that non-bank lenders are at the heart of the new scheme.”
What the Treasury should do
Platforms and industry stakeholders have long called for more P2P lending platforms to take part in the emergency loan schemes.
Perhaps more will be accredited for the successor scheme, having seen the loan volumes that Funding Circle, Assetz Capital and LendingCrowd have delivered through CBILS. Funding Circle has become the country’s fifth largest CBILS lender.
“They’ve played a fundamental part of the schemes and have shown technology can play a good part in the efficient distribution of capital,” said Frank Wessely, partner at insolvency advisory firm Quantuma.
“I hope the government takes note when authorising platforms for the successor scheme.”
A spokesperson from LendingCrowd, which was accredited for CBILS in July and began lending under the scheme in September, said support is needed for the longer-term as the country moves into a recovery.
“What was put in place from the government was good for businesses but helped with survival and businesses need funding for growth as we move into the recovery,” the spokesperson said.
“But going into additional restrictions, you can’t predict what will be needed when. We just have to keep on top of things.”
P2P lenders interested in taking part in the successor scheme
Funding Circle has previously said it would welcome a successor scheme and Assetz Capital’s Law fully expects his platform to take part in it.
Folk2Folk has also expressed interest in taking part in a successor scheme after being unable to secure the institutional funds for lending under CBILS since its accreditation to the scheme last July.
“We continue to have ongoing discussions with institutional investors regarding sourcing CBILS funding on the right terms,” said Roy Warren, managing director of Folk2Folk.
“We eagerly await news about future successor schemes and hope they will be of significant duration to allow marketplace lenders adequate opportunity to organise their institutional funding in order to participate alongside traditional lenders.”
David Bradley-Ward, chief executive of Ablrate, is also interested in taking part in a successor scheme after his platform failed to get accredited to CBILS.
This was because the British Business Bank told the lender it did not have enough time to get the institutional funds in place to lend under the scheme by its original deadline of 30 September.
“It depends on what the future scheme is, if it is some sort of guarantee scheme, I don’t think there will be an issue bringing in institutional money especially with the functionality we have,” said Bradley-Ward.
