We're calling for collaboration with the major banks, having raised debt financing to support new customers.

Banks have seen a huge demand from businesses seeking financial support through the Coronavirus Business Interruption Loan Scheme (CBILS), so much so that many are struggling under the weight of new applications. Small businesses are the backbone of our economy, and we want them to survive the pandemic and continue to thrive in the future. To try and share some of the load, we’re urging banks to work with us to ensure businesses can access CBILS finance as quickly as possible.

With the new finance we’ve raised, we plan to scale up our CBILS offering, and start accepting applications from new customers.

Businesses face delays applying to the banks

Since May, more than 7,000 CBILS facilities have been approved each month, similar to the volume of loan approvals for SMEs before coronavirus. However, with banks facing additional operational pressures, including approving over 1 million Bounce Back Loans and providing consumer credit support, thousands of small businesses are facing delays in their applications.

And that’s not all. Based on our analysis of HM Treasury data, the number of CBILS applications awaiting approval is rising. With CBILS set to close in September, the demand for these loans is likely to increase in the coming weeks, putting more pressure on large lenders:

What the data says:

• the gap between the number of applications and approvals has grown every week since the launch of Bounce Back Loans, rising from 40,560 in mid May to 58,707.
• the demand for CBILS has remained consistent over the same period, with an average of 3,481 new weekly applications – that’s a new application every 3 minutes over the last 2 months. In the last week of available data, there were 3,729 new applications.
• of the 790,000 businesses with more than £250,000 in annual revenues, we estimate a large number could yet apply to the scheme, creating an unserviceable demand.

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How iwoca can help – a decision in days

“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,” says Christoph Rieche, CEO and co-founder of iwoca. “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.”

We’re calling on the UK’s largest banks to refer businesses they cannot serve to the FinTech community. This means businesses who have:

• waited for over 2 weeks to receive feedback on their application
• either withdrawn or have incomplete applications that haven’t been followed up by banks staff
• struggled to access a bank relationship manager, and are instead being served through call centres.

Chris Matthews is the CEO of Silverlink weight loss clinics – now funded by iwoca. He explains how he's waited over three months to hear from his bank, highlighting the urgent need for a referral system.

“Businesses have gone bust waiting,” says Chris. We’re still waiting for a decision – 12 weeks later and we’ve been promised we’ll get one by the end of the week for the last nine weeks. My finance director has been on the phone to my bank constantly trying to get them to ring her back. She’s been leaving messages that don’t get answered, promises that don’t get kept.”

Every business applying for an iwoca CBILS facility receives a dedicated account manager. This support means that on average customers receive a final decision and funds in their bank account in around 3 days.