Starling Bank is working closely with the British Business Bank to get lending through the UK government’s Coronavirus Business Interruption Loan Scheme (CBILS) as soon as possible.
A spokesperson for the digital bank, which was accredited by the British Business Bank as a CBILS lender earlier this month, told FinTech Intel: “Since we were accredited as a Coronavirus Business Interruption Loan Scheme we have been working closely with the British Business Bank to ensure that we are in a position to give our business customers the financial support they need.”
“We know that for some companies, timing is everything, therefore we want to be in a position to allow people to apply for this loan as soon as possible.”
Small and medium-sized entities (SMEs) will be able to apply for CBILS loans via the Starling Bank website. The scheme was launched last month, in a bid to financially support British businesses during the ongoing Covid-19 crisis.
Under CBILS, Starling Bank will provide term loans of between £5,000 and £250,000 to SMEs that are struggling financially as a result of the pandemic.
The first 12 months of interest on the facility and any arrangement fees will be paid by the UK government as a business interruption payment. This means smaller businesses will benefit from no upfront costs and lower initial repayments.
No personal guarantees will be required, so borrowers and guarantors will not have to put up their principal private residence as security.
SMEs with an annual turnover of up to £45 million can apply for a Starling Bank CBILS term loan, if they meet all of the following criteria:
- Limited company or limited liability partnership
- Trading for more than 18 months
- Have a good credit history with no arrears or defaults
Starling Bank is also offering business overdrafts of £1,000 to £150,000 under the scheme, with sole trader businesses also eligible to access a business overdraft up to £10,000.
Loans are available for terms of up to five years, while overdrafts are a revolving credit facility and renewable annually.
OakNorth Bank, Co-operative Bank and Cynergy Bank have also been approved as CBILS lenders.
Starling Bank, meanwhile, has revealed the spending habits of its customers during the lockdown in the UK.
Unsurprisingly, spending on video games and retail therapy increased substantially, with Amazon, Argos, ASOS, John Lewis and Apple Store all enjoying high demand.
Among the spending declines were coffee shops and transport.
Across the UK, the average value of a transaction made by a Starling customer has risen significantly, particularly in London.
The average transaction value of a Starling customer in London for the week ending 22 March was £53.57. Two weeks later, (week ending 5 April), it more than doubled to £107.72 (+101%).