News Briefing - Crowdfunding, SME And Alternative Finance

A horserace used as a metaphor business and investment.

1.UK – AltFi

Citywire reports:

“FCA scraps Mifid 10% letter rule until October. The FCA has issued flexibility for six months over the Mifid II requirement for firms to report a 10% portfolio drop within 24 hours.”

 

 

2. UK – SMEs

Chancellor of the Exchequer Rishi Sunak has answered the calls of many SMEs and industry leaders to overhaul the initial Coronavirus Business Interruption Loan Scheme (CBILS), according to AltFi.

“The £330bn economic stimulus was announced just over two weeks ago and has already seen a huge overhaul after claims of inefficiency and being too difficult to access.

Sunak announced last night that a new scheme called the Coronavirus Large Business Interruption Loan Scheme (CLBILS) will now include SMEs who feared they wouldn’t get the support they needed in time.

CLBILS extends to cover businesses with an annual turnover between £45m to £500m and will offer loans of up to £25m—the new scheme's predecessor only included businesses with an annual turnover under £45m and only offered loans of up to £5m.

The Government has also announced that it is preventing banks from requiring personal loan guarantees for loans under £250,000 to help speed up the rate of approval.”

3. UK – FinTech

AltFi carries an opinion piece arguing that the UK should follow Australia’s lead in supporting non-bank lenders.

“If the country is to get through the coronavirus crisis with as little damage to the economy as is possible, it is the SMEs and the millions of people that they employ that will need to be supported. That will require the non-bank lenders to actively be able to continue to lend. Furthermore, the non-bank lending sector is going to be a critical component to helping the economy recover, when we eventually get to the other side of this crisis. We should look to Australia as an example of how this can be done.

The non-bank lending sector is a key part of the UK economy, providing finance in areas where the banks aren’t capable of assessing creditworthiness in a timely way, and to borrowers that are often SMEs, the self-employed, or have complex incomes. In the mortgage sector alone, non-bank lenders account for approximately 10 per cent of all mortgages advanced in the UK - serving the needs of millions of customers, and itself employing almost 10,000 people as a sub-sector.

To operate, non-bank lenders rely on banks and institutional investors, and the public capital markets for their funding. That is, non-banks rely on banks to provide them with warehouse funding and for the capital markets to buy their securitisations, in order to fund the loans that they then provide to their borrowers.”

 

4. International – FinTech

UKTech News reports:

“Enterprise connectivity platform Yapily has today announced that it has raised $13m in a Series A funding round.

The fintech will use the investment to drive open banking adoption by organisations across Europe; providing a strong, secure and powerful connectivity layer that enriches customer experiences and creates financial opportunity.

The investment was led by Lakestar, an early investor in Skype, Spotify, Airbnb and Facebook as well as one of Europe’s biggest fintechs – Revolut. Existing investors HV Holtzbrinck Ventures and LocalGlobe also participated in the round.

Angel investors also include Taavet Hinrikus (TransferWise chairman and co-founder), Ott Kaukver (Twilio’s CTO), Roberto Nicastro (UniCredit’s former deputy CEO) and Frank Strauss (Former CEO of Deutsche Postbank).

The new funding comes during a successful period for the London-based fintech, in the last six months its monthly recurring revenue has grown by over 500%; quadrupled its headcount in London to 45; and expanded into Italy, Ireland and France, as it works towards total market coverage in Europe, with new territories added regularly.”

 

5. International – FinTech

Crowdfundinsider reports on a move directing future business away from the UK as a direct result of Brexit.

“Digital bank Revolut recently announced plans to move non-UK customers in Central and Eastern Europe in its newly licensed Lithuanian entity before the end of the Brexit transition period in December 2020. The company went on to share more details about its response to Brexit.

“We have been planning to make sure our users are unaffected by any Brexit outcome. We have set up a licenced European company which we will transfer all non-UK customers to in the case of a no trade-deal Brexit, and continue to offer the same Revolut services.”

Noting why it is able to move accounts to the European company, Revolute stated it has the right to transfer its legal relationship from its UK company to its European company under its terms and conditions.”