Government Guaranteed Loans
1st June 2020
We have been working closely with the British Business Bank and HM Treasury since March to ensure that Crowd2Fund becomes part of the emergency SME relief scheme, called the Corona Virus Business Interruption Scheme or CBILS (1). CBILS offers a very generous 80% government guarantee for institutional credit to encourage them to deploy much-needed emergency capital to UK businesses.
Crowd2Fund has been comprehensively reviewed by the CBILS team at the British Business Bank to validate the suitability of the Crowd2Fund platform to be utilised to deploy credit. Multiple government departments have been supporting the repositioning of the platform, to facilitate the deployment of large volumes of institutional credit via the state of the art system. Crowd2Fund plans to deploy an initial £100m to SMEs from 2020 to 2021. The terms of the credit have been defined by the market and British Business Bank which requires savings from the guarantee to be passed down to borrowers via a reduced interest rate.
In the current climate, owing to the increased levels of risk, Crowd2Fund would normally be approving businesses at a maximum of 15% APR. With CBILS the borrower rate will reduce to a more affordable 7-8% APR with additional discounts on fees for businesses. Crowd2Fund will join other approved lenders, which now include a number of FinTech platforms. Early on in the crisis, Crowd2Fund campaigned for FinTech platforms to be utilised by the government to expedite the deployment of capital to SMEs – to help preserve jobs post-crisis.
Becoming CBILS approved will form part of the new Crowd2Fund proposition and will also allow the platform to dramatically scale up. Private investors will also be invited to invest alongside the institutional credit with the same terms, thus ensuring that Crowd2Fund’s key differentials remain consistent and attract highly innovative and growing businesses. We will also continue to offer exclusive opportunities for private investors after we relaunch.
Crowd2Fund will give private investors access to this exciting entrepreneurial market and will also ensure that investors play their key role in approving and validating businesses through the continued ability to review businesses for themselves, ask businesses questions and ultimately invest.
Crowd2Fund is currently in the process of negotiating a credit line with multiple, multinational institutional banks and funds, to provide a significant volume of emergency credit to Crowd2Fund clients and other businesses which fall into the same important demographic, critical for economic growth and job creation.
Chris Hancock, founder and CEO said:
“We’re thrilled to be one of the platforms that are being utilised by the government to help reboot the economy post-crisis. The Crowd2Fund platform and expertise can ensure that high volumes of capital can be deployed to the right businesses at pace. We’re glad to see the state-of-the-art technology being put to use.”
“The team at the British Business Bank and the Treasury have been phenomenal in working collaboratively with us to ensure the platform is fit for purpose and capable of delivering the emergency credit at scale.”
Crowd2Fund is currently finalising the re-launch of the platform, reviewing compliance procedures and preparing new and highly innovative financial products to be the core of the business in a post COVID19 world. FinTech will continue to grow and prosper under these new government initiatives and is absolutely critical to ensuring that the UK remains a highly competitive leading economy for years to come.
Capital at risk.
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