New lenders added to coronavirus business loan scheme

Several new lenders have been accredited under the government's Coronavirus Business Interruption Loan Scheme (CBILS) in the latest attempt to deal with the huge demand for loans from small businesses.

The Co-operative Bank, Cynergy Bank, OakNorth Bank and Starling Bank join more than 40 other approved lenders.

Coutts has also been accredited as part of RBS Group's existing accreditation and Arkle Finance, Close Brothers and Secure Trust Bank join CBILS after being accredited for the Enterprise Finance Guarantee scheme earlier this year.

The inclusion of new lenders following continued criticism that entrepreneurs are struggling to access funding with long waits for a decision on applications.

Several business owners have also told Enterprise Nation that lenders are only accepting loans from existing customers and not providing funding below £25,000.

Of the new lenders, Starling Bank will be offering loans from £5,000 and overdrafts from £1,000, while The Co-operative Bank is providing loans and overdrafts from £1,000.

Enterprise Nation asked the British Business Bank, which administers the scheme, about banks providing loans to existing customers and a spokesperson said: "Lending decisions are made by the lenders themselves, and this includes whether or not facilities are made available to existing or new customers.

"Following the announcement today of new lenders being approved, the British Business Bank is working at pace to approve more lenders so that even more businesses will be able to get a CBILS-backed facility from their lender of choice. We expect to be able to announce the accreditation of further lenders soon."

Update

Starling Bank has confirmed it will lend to new customers if they set up a business current account. It has also confirmed its criteria for loans:

• limited company or limited liability partnership turning over less than £45 million

• trading for more than 18 months

• have a good credit history with no arrears or defaults

Starling is also offering business overdrafts of £1,000 to £150,000, with sole trader businesses eligible to access a business overdraft up to £25,000.

CBILS

CBILS was set up in March to help firms deal with the impact of the coronavirus pandemic.

Businesses turning over less than £45 million can access loans and overdrafts of up to £5 million that are fee and interest-free for 12 months. The government supplies an 80% guarantee to encourage lenders to provide funding but borrowers remain 100% liable for the loans.

Last week it was announced that the requirement for banks to first assess whether firms are eligible for standard commercial loans had been removed in an attempt to speed up finance approvals. Lenders can also no longer ask for personal guarantees for loans under £250,000.

The latest figures show that 2,576 loans worth £453 million have been approved, more than double what it was before the changes were made, but that's from a total of more than 300,000 enquiries.