Starling Bank and Funding Circle team up to provide £300m in CBILS loans
Starling Bank and the UK’s largest alternative lender Funding Circle have teamed up to provide small businesses with £300 million in loans under the Coronavirus Business Interruption Loan Scheme (CBILS).
Starling will provide lending services through Funding Circle’s platform in a bid to help more than 4,000 small businesses, a figure the fintechs have calculated based on the average loan size of £70,000.
Both start-ups were accredited by the British Business Bank last month, with Starling Bank also later getting accredited for the Bounce Back Loan Scheme (BBLS) which launched last week.
The strategic partnership is designed to help boost cash flow for businesses during the UK’s coronavirus lockdown.
“This partnership with Funding Circle provides us with another outlet, on top of our own CBILS and BBLS lending, to help meet the needs of business owners affected by coronavirus,” says Starling Bank’s CEO Anne Boden in a statement.
“It’s a great example of the fintech industry pulling together to meet a very urgent need.”
On 11 May, the UK’s prime minister Boris Johnson, unveiled the government’s 51-page exit plan for a phased lifting of lockdown measures.
The plan’s third phase, set to start “no earlier than 4 July”, would see the reopening of “at least some of the remaining businesses and premises that have been forced to close”, such as hairdressers, some hospitality venues such as pubs and restaurants, and various public spaces such as leisure centres.
The prolonged lockdown for these businesses will mean sustaining cashflow is vital, making Starling Bank and Funding Circle’s partnership timely.
The fintechs point out that since 2017, the majority of net growth in small and medium-sized enterprise (SME) finance has come from fintech lenders, citing March 2020 Bank of England data.
“Small businesses form the backbone of the UK economy and will be at the heart of the nation’s future recovery,” says Funding Circle’s UK MD, Lisa Jacobs.
“We are pleased to be able to offer businesses a decision in as little as four minutes through our instant decision technology.”
These fintechs were joined this week by a new round of accredited lenders. MarketFinance, Capital on Tap, Bank Leumi and Shawbrook Bank have all joined what is now more than 60 CBILS accredited lenders, and the Bank of Ireland UK and Skipton Business Finance can offer loans under the BBL scheme.