News Briefing - Crowdfunding, SME And Alternative Finance

Business people sitting at tables, discussing data

1. UK – FinTech

 

P2P Finance News reports: 

 

“Banks are pressuring borrowers to payback coronavirus business interruption loans (CBILS) early, it has been claimed. 

Richard Churchill a business advisory partner at Blick Rothenberg has said that banks are asking borrowers to repay loans earlier than necessary despite 80 per cent being guaranteed by the government. 

“The banks are changing their attitude to loans and in many cases are requesting that firms pay back some or all of the loans, earlier than planned,” Churchill said. 

“This is extremely worrying especially as the government-backed scheme guarantees the bank 80 per cent of the loan they are making, and their risk is much lower than it would normally be. 

“The banks are putting businesses under pressure they do not need, which is going to be extremely damaging to UK businesses that have changed business models and produced forecasts going forward on the basis of their existing funding. 

“Clearly when a business needed borrowing to survive, it is not able to repay significant elements of this only a few months later.” 

Churchill said banks need to be reminded of their responsibilities to support businesses and added that a more practical step to help solve the issue of affordability assessment would be for the loans to be able to be extended over a longer period, therefore reducing the annual repayments for borrowers. 

2. UK – FinTech 

UK’s lenders helped support over 1.2m businesses through government-backed loan schemes, according to figures published by HM Treasury and reported in AltFi.  

“Since its launch, the 100-per-cent-government backed Bounce Back Loan Scheme (BBLS) has been the most popular with the nation’s SMEs.  

In total, over 1.16m SMEs have accessed funding through the BBLS, with the number continuing to creep up every week.  

The UK’s smallest businesses have received nearly £35bn in loans from banks and non-bank lenders.  

Under the Coronavirus Business Interruption Loan Scheme (CBILS) over 59,000 businesses have been given more than £13.4bn in loans  

The Coronavirus Large Business Interruption Loan Scheme remains the least popular government-backed programme, with only 497 businesses accessing £3.4bn in funding.” 

 

3. UK – FinTech 

 

More than 1.2m businesses have now received support through government-backed coronavirus lending schemes, according to P2P Finance News. 

“The latest Treasury data, as of 9 August, shows most lending has come through the bounce back loans scheme (BBL) at £34.96bn to 1.15m businesses. 

Another £13.4bn has been lent to 59,520 firms under the coronavirus business interruption loans scheme (CBILS) and there has been £3.4bn lent to 497 firms through its larger counterpart. 

The figures also show £526.3m of convertible loans have been approved to 565 businesses through the future fund. 

“As the economic effects of the pandemic continue to develop, the UK’s banking and finance industry remains committed to helping the nation’s businesses through the crisis,” Stephen Pegge, managing director of commercial finance for banking trade body UK Finance, said. 

“The government-backed loan schemes are just one part of the industry’s broader plan for helping the nation’s businesses, and operate alongside commercial lending, capital repayment holidays, extended overdrafts and invoice finance facilities. 

“It is important to remember that any lending provided under government-backed schemes is a debt not a grant, and so firms should carefully consider their ability to repay before applying.” 

4. UK – FinTech 

 

Cross-border payments tech firm Vitesse has closed a £6.6 million Series A funding round, according to Business Cloud.  

“The round was led by Octopus Ventures, with participation from existing shareholders including Hoxton Ventures and other angel investors.   

FCA-regulated Vitesse operates one of the largest domestic banking and payment networks in the world, giving its customers direct access to more than 100 countries’ domestic payment networks, covering over 60 currencies.    

To date, the company has processed over £2.1bn across almost 2.3m real-time transactions.  

The firm says the investment will allow it to continue its rapid growth trajectory by building out sales and marketing functions and expanding its footprint in the US market.” 

5. UK – AltFi 

FT Adviser reports: 

“The High Court has ordered unregulated pension introducers Avacade and Alexandra Associates, as well as their directors, to pay a combined £17,450,000 in restitution to members of the public who were induced to transfer their pensions into self-invested personal pensions (SIPPs). 

The order was made on 7 August 2020, commanding Avacade to pay £10m to consumers, Alexandra Associates £750,000, directors Craig Lummis and Lee Lummis were each ordered to pay £2,500,000 and Raymond Fox, another director, £1,700,000. 

In a judgment dated 30 June 2020, the Court found that Avacade's and Alexandra Associates' activities were unlawful as they had engaged in the regulated activities of arranging and advising on investments, made unapproved financial promotions through their websites, promotional material and in telephone calls to consumers and made false or misleading statements.”