Blog Post

COVID-19 has Spiked Unmet Demand for SME Lending – How the UK Government’s BCR Programme is Helping

Across the UK 360,000 SMEs loans have been rejected and the loans approved, were 30% below pre-COVID averages – BCR can help.

COVID-19 is reshaping the world as we know it, and this includes the lending sector. The UK’s small and medium-sized enterprises (SMEs) - the backbone of the country’s economy which account for around half of turnover in the private sector - need access to funds fast as they seek to secure their cashflow and stay afloat amidst the pandemic.

There is significant demand in the SME market for borrowing, a fact evidenced by the popularity of the government-supported funding programmes maintained by the British Business Bank since May 2020.

Whilst over £50 billion of funding had been provided by September 2020, the government programmes - including the much-publicised Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), the Bounce Back Loan Scheme (BBLS), and the Future Fund – simply aren’t meeting the expansive needs of many businesses.

The lenders accredited for these programmes by the British Business Bank had rejected 22% of applicants as of 20 September, according to publicly-available data, amounting to over 360,000 businesses.

Lending to SMEs under government programmes – number of facilities approved (Sep 2020)

bbls-uk-financeAnd those that are being helped aren’t being helped enough. Ezbob’s own research shows that the mean loan amount across all government programmes as of 20 September was £43,671, whereas the mean for other, non-British Business Bank supported lenders that Ezbob works with is over £64,000. This suggests that the lending supported by the UK government guarantees may be insufficient for the working capital needs of those businesses.

Assuming the government programme mean loan amount is maintained, this puts unserved demand at over £15 billion from those who were rejected. The addressable market for the UK’s lenders is huge – and Ezbob can help you to unlock this opportunity.

Democratising access to the latest lending technology

Using the £2.5m grant awarded by the Banking Competition Remedies (BCR) programme, established to implement the Alternative Remedies Package of measures agreed between the UK Government and the European Commission, Ezbob has recently unveiled Ezbob Express, a new product that will help the UK’s banks and other financial institutions increase SME lending amidst COVID-19.

Ezbob Express is an affordable digital loan origination system that helps lenders of all sizes increase their loan book and profitability.

The platform uses integrated Open Banking data sources and AI-powered decisioning analytics to reduce the amount of customer data input by 75%. The net result is a super-fast customer application experience that improves completion rates by 400% and provides a credit decision within minutes. Operating costs are reduced by 60% because the all-digital platform automates most manual processes. Lastly, the platform is bank branded and is tailored to the institution’s credit risk policies.

The BCR funds have allowed Ezbob to democratise our technology by subsidizing the cost of such a modern and competitive lending platform. It is part of the government’s goal of enabling banks of all sizes to better compete in a world where organisations increasingly differentiate on the level of technology investment.

We are working with small lenders throughout the UK to help them rapidly implement this affordable digital solution to meet the spike in demand from the UK’s beleaguered SMEs.

The BBL programme has now been expanded and now allows SMEs which didn’t get the full £50k amount to apply for the remaining allowance.

Get a demo to find out more about how Ezbob Express can help you to expand your lending services and offer BBL loan origination.