The founders of a dozen fast-growing UK tech companies have asked the government for help in opening up small businesses to them.
Tech start-ups such as Citymapper, Darktrace, Deliveroo and Graphcore have written to Chancellor Rishi Sunak asking that a special task force be set up to look at how to set up loan programs for businesses like theirs, as well as to change the rules on emergency loans that have already been advertised to accommodate them, giving them the same access as other small businesses.
The open letter reads: “We are therefore writing to urge you to urgently set up a meeting of the leading tech companies working group to work with you and your officials to find a way for the tech companies to strong growth to access loan programs you already have in place or new schemes if necessary.
Speaking at yesterday’s Downing Street press conference, the Chancellor announced that so far only 2,500 small and medium-sized businesses have obtained emergency loans from banks.
However, the Treasury insisted that the value of corporate credit quadrupled over the past week as the government increasingly called on the government to expand its support.
Tech firms claim that, because they have invested in innovation and expansion rather than “short-term profitability”, as growth firms they are now not eligible for the Coronavirus Business Interruption Loan Program emergency loans, which aims to support businesses in the dark before the Covid-19 pandemic strikes.
“We’re hearing reports that – although these are ’emergency’ loans – the application process to get them is still very demanding,” said Mike Cherry, national president of the Federation of Small Businesses. The temperature. âOf course, loans can only be made to viable businesses, but banks need to understand that time is running out. “
Part of the problem is that the big banks have been inundated with applications, with call center staff working from home and banks prioritizing existing customers to applicants who use fintechs, such as Tide.
Open an emergency loan program
I also write in today’s newspaper Times, former Treasury Secretary Baroness Morgan called for the opening of CBILS, administered by the British Business Bank, to fintechs.
“We have an incredibly innovative and thriving financial technology industry, teeming with ideas on how to keep small businesses running,” writes Baroness Morgan, the former Secretary of Culture. âThe British Business Bank, the Treasury and the Bank of England need to be open to the fact that FinTech companies often operate in ways that come out of the traditional mold, but bring their own efficiency. “
However, while BBB has been in talks with new fintech lenders such as OakNorth, it also has staff issues, with fewer than 50 employees reviewing the series of loan applications now flowing from CBILS lenders.