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The news: Tuesday marks one year since the UK government launched his Bounce Loan Program (BBLS) to help small and medium-sized enterprises (SMEs) affected by the coronavirus pandemic. Government officials hailed the BBLS, which closed to further applications in late March, as a success, citing figures including a three loans per minute.
More on this: The BBLS, which offered SMEs up to £ 50,000 ($ 64,118.18) each and is 100% supported by the government to support participating lenders, issued a total of £ 46.53 billion ($ 59.67 billion) in funding at the end of March. In February, the government Free companies have the option of extending their deferment period from 12 at 18 months, and extend their loan terms to 10 years—From the original 6 years– under an update entitled “Pay As You Grow”.
The big takeaway: While the initial loan issuance was successful, participating finance companies must now turn to managing SME repayments and convincing borrowers to become loyal customers.
Pay As You Grow is expected to be widely used: at least 42,000 businesses are requesting payment extensions or reimbursement holidays. through The Financial Times and changing customer loan terms could make managing repayments more difficult. In addition to this, some banks will also process to accept loan applications under the UK government’s successor program, called the trade-in loan program (RLS). The neobanks and mainstream banks that participated will also need to find a way to persuade pandemic-era borrowers to become repeat customers – steps some are already taking. Recent examples include Starling, which has its MarketPlace as a possible retention product, and NatWest, which recently unveiled SME offerings including a incubator program and a rewards app from his unit Tyl.
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