A European fintech company majority-owned by Santander will this week begin channeling tens of millions of pounds to small businesses which have found themselves frozen out of the government’s emergency loan schemes.
Sky News has learnt that Ebury will announce on Tuesday the immediate availability of £40m from its balance sheet for UK-based companies which cannot access funds under the Coronavirus Business Interruption Loan Scheme (CBILS).
The move will underline the determination of non-bank lenders to tap into schemes such as CBILS, which has been at the centre of criticism over the pace and scale at which mainstream banks are releasing capital to troubled SMEs.
Sources said that Ebury’s initial £40m, which may grow substantially both in the UK and other European countries as the pandemic continues, would specifically be aimed at businesses frozen out of CBILS and other government programmes.
Ebury is, however, said to be in discussions with the British Business Bank about becoming an accredited CBILS lender.
Santander bought a 50.1% stake in Ebury last year for £350m, reflecting the enormous interest among traditional banks in tapping into financial innovators which can process large volumes of loan requests entirely digitally.
The £40m to be announced on Tuesday is only likely to help a few dozen companies, given Ebury’s typical SME loans comprise sums of up to £1.25m.
Ebury specialises in the speedy provision of working capital to its customers – a particularly acute problem during the coronavirus crisis because of the suddenness with which it brought parts of the economy to a grinding halt.
Juan Lobato, Ebury co-founder, said: “Getting finance to UK companies is essential in helping manage the cashflow pressures they are currently experiencing, and Ebury is delighted to be offering this financing initiative.
“Ebury was founded to fill a gap left by the 2008 financial crisis and in this latest crisis it is ideally placed to help the Government’s distribution of its financial aid packages to large and small businesses.”
The Treasury, the BBB and the high street lenders will all face scrutiny this week with the release of the latest figures for lending under the CBILS scheme.
Sources expect the data to show “robust” growth in both the number of loan applications being approved, and the overall amount lent.
A large number of SMEs have complained that banks have rejected applications for reasons including their partial ownership by private equity funds, which has artificially resulted in them being ruled ineligible on the basis of their turnover being too large.
Others have complained that their early-stage nature has meant that they were denied access because they are loss-making.
Speaking to Sky News’ Sophy Ridge on Sunday programme, Alok Sharma, business secretary, said that £800m had been lent so far under CBILS to 4200 companies.
“I have spent the last couple of days talking directly to some of the largest lenders who are part of this scheme and I have been very clear to say to them that we need to get money out of the door as quickly as possible,” he said.
“They understand that… we have set this up at pace and everyone is literally working around the clock.”
CBILS is aimed at companies with sales of up to £45m, although an equivalent mechanism for larger companies is also being established.
Sky News revealed on Sunday that the Coronavirus Large Business Interruption Loan Scheme – targeted at businesses with turnover of more than £45m – would be adjusted to remove the provisional upper sales threshold of £500m, and would double the amount that applicants could borrow to £50m.
The proposals are set to be signed off by Rishi Sunak, the chancellor, in the coming days.