iwoca urges UK bank CEOs to refer CBILS applicants

According to iwoca, small businesses' access to CBILS is being limited by the additional operational pressures for banks in approving more than one million Bounce Back Loans and providing consumer credit support

Small business lender iwoca has called on the chief executive officers of the UK’s largest banks to actively refer applicants to the fintech to speed up their access to the Coronavirus Business Interruption Loan Scheme (CBILS).

The call for referrals comes as iwoca announces a new fundraising round of £100 million, which the lender will use to scale its CBILS offering and fund new customers through the scheme for the first time.

According to iwoca, small businesses’ access to CBILS is being limited by the additional operational pressures for banks in approving more than one million Bounce Back Loans and providing consumer credit support.

Its analysis of UK Treasury data reveals that the gap between the number of CBILS applications and approvals has grown every week since the launch of Bounce Back Loans, rising from 40,560 in mid-May to 58,707.

Demand for CBILS has remained consistent over this period, with an average of 3,481 new weekly applications—or one every three minutes. In the last week of available data, 3,729 new applications were submitted. 

With CBILS due to close in September, demand is likely to rise over the coming weeks, especially as other UK government support measures such as the Job Retention Scheme wind down.

A large number of the 790,000 firms with more than £250,000 in annual revenues could yet apply for CBILS, according to iwoca, putting a great amount of pressure on large lenders dealing with unprecedented demand for finance from small businesses that are going through the application process.

In order to address this demand, iwoca is calling on the UK’s largest banks to refer those businesses that they do not have the ability to serve to the fintech lender.

These businesses include those that have been waiting for more than two weeks to receive feedback on their application, those that have either withdrawn or have incomplete applications that haven’t been followed up by the banks’ staff, and smaller firms requiring a relationship manager to complete their application but don’t have access to them as they’re served through the banks’ call centres.

A direct referral process is key as the vast majority of businesses wouldn’t otherwise consider seeking finance from an alternative lender, according to iwoca.

Every business that applies for a CBILS facility up to £350,000 from iwoca receives a dedicated relationship manager to guide them through the process. This support means that on average customers receive a final decision and funds in their bank account in around three days.

Christoph Rieche, chief executive officer of iwoca said: “We want to give small businesses the best chance of finding the support they so clearly need, which means the banks must work with us. It’s not acceptable that thousands of the businesses applying for CBILS are left hanging for weeks or even months without getting a decision from their bank. As an industry we have a joint responsibility in supporting this effort so that SMEs can access finance fast to survive and thrive.”

Small business lender iwoca issued a similar call to the accountancy profession last month, identifying their role as crucial in helping businesses access the finance they need to secure their future beyond the Covid-19 pandemic.

Image: Shutterstock

Mark Dugdale