Firms facing a liquidity crunch will not have to pay any interest or fees for the first year. Lenders benefit from an 80pc government guarantee, meaning the taxpayer will step in to cover most of the shortfall if a borrower fails to repay.
The scheme’s attractions will be worth nothing if companies cannot access cash quickly enough. Banks have been panned for not processing loans more quickly. Fintechs, on the other hand, argue that their streamlined processes allow them to approve lending more swiftly.
Starling Bank, another UK-based digital lender approved for CBILS lending last weekend, says it is aiming to process applications in 48 to 72 hours once it starts lending under the scheme.
Juan Lobato, founder and co-chief executive of Ebury, a fintech majority-owned by Santander, says his business generally signs off on loan applications in 24 to 48 hours. Ebury is one of several fintechs still waiting to be approved for CBILS lending but Lobato has no complaints about the speed of the accreditation process run by the British Business Bank (BBB), which administers the scheme.
“They’re making sure that their scheme will really enable us to do something that we wouldn’t be able to do otherwise,” Lobato says. “I thought that was good and really showed that this scheme is actually going to benefit the recipients.”