The Coronavirus Fintech Taskforce (CFT) came together to provide a turn-key origination and underwriting platform to support banks, alternative lenders and private debt lenders virtually and digitally deploy funds to businesses, during the Covid-19 outbreak quickly and efficiently.
Founded on 25th March, 2020, it is made up of a group of industry experts and companies, including Trade Ledger, a digital lending platform; Wiserfunding, a digital SME credit scoring platform; Nimbla, a trade credit insurance provider, and NorthRow a remote client onboarding platform.
The coronavirus pandemic has caused immediate and potentially long-lasting impacts to the UK’s economy. The sudden and profound impact on customer demand is leaving SMEs in chronic need of credit to manage their ongoing costs and may well lead to a recession over the coming months.
The COVID-19 outbreak is putting immense financial pressure on global supply chains. Now more than ever, SMEs need reliable cash flow if they are to stay in business. In normal times, lenders take on average 90 days to deploy capital to SMEs. Furthermore 57% of all SME credit applications are either abandoned because they are just too hard, or ultimately rejected. This challenge is exacerbated by the Coronavirus crisis.
The UK Government’s Coronavirus Business Interruption Loan Scheme (CBILS) scheme’s fund has provided a £330bn capital injection to support SMEs during the crisis. This is a massive boost to an underserved market at an extreme time of need but its impact will be lost if lenders aren’t able to get these loans to their customers quickly. The Coronavirus Fintech Taskforce addresses this issue.
The taskforce is offering financial institutions easy and quick access to a turn-key lending platform targeted at SME’s, including risk assessment, KYC and insurance capabilities, to help alleviate the crisis and expedite the allocation of funding.
The lending platform combines the best of technology and data integrations to digitally originate and underwrite lending to SMEs. It can be used by individual lenders or, it is hoped, form the basis of a consortium that would intermediate between multiple lenders – including private funds and the British Business Bank, along with the multitude of SMEs seeking lending.
The platform can support any type of term loans, invoice finance, asset finance & inventory finance and aims to help lenders to deploy specialist loans of over £500K within days as opposed to weeks.
The CFT coalition partners are working with industry leaders to propose a government-backed scheme which creates a new commercial lending infrastrcuture for the UK financial services industry.
We have a desire to link this inititive to other similar programs such as the Competition & Markets Authorities (CMA)’s Open Banking regime and the Bank of England’s new Open Data For SME Finance initiative which aim to create a more competitive and advanced environment for SME’s in the UK.
The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak. The scheme’s fund has provided a £330bn capital injection to support SMEs during the crisis. There is no fee for businesses to access the scheme and the UK Government will cover the first 12 months of interest payments and any fees lenders charge under a CBILS facility. This means businesses benefit from lower upfront costs and repayments.
However, the scheme’s £330bn fund is a massive boost to an underserved market at an extreme time of need but its impact will be lost if lenders aren’t able to get these loans to their customers quickly. Our taskforce of industry experts have come together to address this issue.
For more information on CBILs and their associated fund, please visit: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/
The Banking Competition Remedies (BCR) was set up to implement the Alternative Remedies Package of measures agreed between the UK Government and the European Commission and is focused on giving customers more choices in banking. It had a £775million ($987.7 million) purse to distribute from the Royal Bank of Scotland, which was a condition of it being bailed out in 2008. BCR is independent from RBS and the UK Government. It is governed by an independent Board of Directors.
Trade Ledger have written an open letter to the BCR, imploring them to use the £100M of remianing funds for industry led inititiatives like the SME taskforce – https://smefintechtaskforce.uk/wp-content/uploads/2020/04/Open-Letter-to-BCR_by_Martin-McCann.pdf