Owners of small and mid-size businesses (SMBs) who borrowed under GBP50,000, or 25 percent, of the “turnover limit for BBLs” were eligible to apply for top-up loans as Europe works through its second pandemic lockdown.
The FinTech lender Tide is scrambling to secure the funding necessary to offer BBL top-ups to its customers. Without it, those businesses could be blocked from applying through other means.
“Lending decisions under the bounce-back loan scheme are fully delegated to the accredited lenders. If a lender does not have the capital to support continued funding of new BBLs or top-up BBLs, the British Business Bank is not in a position to force them to lend,” said the British Business Bank, which is tasked with administering the emergency program.
Tide was founded by banker George Bevis in 2015; London venture capitalist Eileen Burbidge serves as the bank’s chair. The FinTech doesn’t qualify for the Bank of England’s term funding scheme aimed at small business lending.
The BBL scheme faced increased scrutiny after it was discovered that some 250,000 SMBs in Britain were locked out of the first round of funds because they didn’t bank with one of the 28 accredited lenders.
“Banks, regulators and the government must work together to ensure firms who previously applied to non-bank lenders are not denied the cash they need to get through a difficult winter,” Hannah Essex, co-executive director of the British Chambers of Commerce, told The Guardian.
“Given that many firms applied for bounce-back facilities at a time when the extent of disruption was so unclear, it’s vital that the rollout of the top-up initiative is a success,” said Mike Cherry, chair of the Federation of Small Businesses.
Digital banks that weren’t part of an earlier funding scheme were not accredited to extend relief to people affected by the coronavirus, the British Business Bank said in March.
Tide expanded its banking services with the help of cloud provider Mambu in April. Enhancements included larger overdrafts, credit cards and invoice financing.