Statement from Theodora Hadjimichael, chief executive of Responsible Finance, regarding the Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme opens to businesses today (23 March), offering emergency financial support for SMEs and microenterprises vulnerable to an economic downturn as a result of the coronavirus pandemic. It will provide working capital loans of up to £5m to smaller businesses across the UK experiencing lost or deferred revenues, leading to disruptions to their cashflow.
Responsible Finance, the network of community development finance institutions, is a stakeholder partner to the British Business Bank. Many of Responsible Finance’s member providers are accredited lenders* for the scheme.
Theodora Hadjimichael, chief executive of Responsible Finance, said:
“Two weeks ago we told the Chancellor that community development finance institutions (CDFIs) must be part of the delivery of this emergency financial support. They can reach microenterprises, SMEs and social enterprises which are not served by mainstream banks, whose need during this time will be acute, as it was at the time of the financial crisis when CDFIs stepped in.
“We welcome the inclusion of community development finance institutions to help to deliver the scheme. They are ready to support the UK’s economy by building the resilience of small businesses and social enterprises. Our members are social enterprises themselves, trusted by their communities, and are proud to participate in the scheme to safeguard jobs and to continue their positive impact in the communities they serve.
“But our members are already experiencing enormous interest in and demand for, the Coronavirus Business Interruption Loan Scheme, which is designed to offer support to new customers and is covered by a government-backed, partial guarantee. Alongside this surge in demand, many responsible finance providers’ existing customers are seeking temporary loan repayment holidays. Our sector plays a unique and vital role in supporting viable microenterprises, SMEs and social enterprises other lenders cannot serve, but we urgently need access to further capital to play our full part in supporting people and businesses through this period of disruption caused by COVID-19.”
*Responsible Finance members accredited as lenders for the scheme include ART Business Loans, askif Inclusive Finance, BCRS Business Loans, Business Enterprise Fund, CWRT, DSL Business Finance, Finance for Enterprise, First Enterprise, GC Business Finance, Let’s Do Business Group, MSIF, Newable, Robert Owen Community Banking and SWIG Finance. Details of the scheme including links to delivery partners are available from The British Business Bank.
Photo: Theodora Hadjimichael of Responsible Finance.
What next?
- Media outlets are welcome to quote Theodora’s comments. If you would like more information or to arrange an interview with Theodora, please contact Jamie Veitch on 07904 272 200 / [email protected]
- Chief executives of our member CDFIs (based all over the UK) are also available to offer comment regarding access to finance for small businesses and social enterprises. To request a comment or interview please contact Jamie Veitch as above.
- Details of the scheme including links to delivery partners are available from The British Business Bank.
The scale and scope of the UK’s responsible finance sector:
- In 2019, responsible finance providers lent £171 million to thousands of credit-worthy businesses and social enterprises rejected by or unable to access finance from mainstream lenders.
- 3,400 businesses were created thanks to this lending.
- 13,800 jobs were created and protected in businesses and social enterprises.
- Responsible finance providers, otherwise known as community development finance institutions, lend to viable but under-served businesses and social enterprises (and to financially excluded individuals).
- The average size of a responsible finance loan for an existing SME was £44,950 over 4.1 years, and businesses borrowing from enterprise-lending responsible finance providers reported an average £320,000 increase in turnover.
- Transparency and affordability are key to these FCA-regulated providers, which will not lend to businesses or social enterprises unless it will increase the business’ chance of success.