Four lenders that have been struggling to keep up with the staggering demand for Covid business loans have asked for their names to be temporarily removed from the Coronavirus Business Interruption Loan Scheme (CBILS) website.
The British Business Bank (BBB), the state-owned organisation in charge of the plan, has confirmed that the lenders requested that their logos be removed from the list.
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The roster contains 40 institutions providing small firms with loans backed by an 80% government guarantee.
Banks are at the front-line of the economic disruption. They are having to deal with issues that simply weren’t on the horizon before the pandemic. Many are being overwhelmed with inquiries and applications for support from both personal and corporate customers.
As well as rising loan losses, banks are contending with another year of squeezed interest margins and subdued consumer lending.
None of the lenders has permanently withdrawn from the scheme
Two of the lenders, which were smaller regional banks, asked to have their names temporarily removed so they could focus on processing the applications they had received since the scheme went live on 23 March, a spokesman for BBB said.
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By GlobalDataThe two larger firms, Aldermore and Secure Trust, asked to be removed so they could update their own websites and marketing material with information about the scheme, said the spokesman, who added that the firms would return to the list in a matter of days.
A HM Treasury spokeswoman said: “The Chancellor has been clear that we all must play our part in the national effort to support businesses and protect jobs.
“We’re working with the financial services sector to ensure that companies feel the full benefits from this support, and hundreds of businesses have had loans approved over the last 10 days,” she added.
“Stringent criteria” remains a hurdle for many small businesses
However, representatives from the SME community have complained that banks are not cooperating and making it difficult for them to access the liquidity they need to remain open.
Shalini Khemka, the founder of E2E, a business network for small businesses and entrepreneurs, said SMEs are unable to access loans unless they meet “some stringent criteria” — which could mean providing personal guarantees or collateral for the loan, and also reports detailing their accounts and future projections.
Lord Leigh, the founder of Cavendish Corporate Finance, said that “banks are being very uncooperative” and called on lenders to stop having a “tick-box mentality” to the criteria small businesses need to meet to successfully get access to loans.
