Continuing my theme: PREPARE for the AFTERMATH $$
This is NOT the time to kick back in your jammies & watch that tiger guy. [I don't even know his name so no link here!]
Use this Corona time wisely... Always be learning, implementing, networking, building...
By: Oscar Williams-Grut Yahoo Finance
"Banks and other mainstream institutions have become reluctant to extend credit to other lending businesses given the current economic uncertainty, creating cashflow problems for many businesses.
“We need this money for operating capital, payroll, rent, because the majority of our customers can’t pay us right now,” David Goldin, the chief executive of online business lender Capify, told Yahoo Finance UK. “The lenders are at risk because we can’t get liquidity.”
The problem has been made worse by new rules from the UK’s Financial Conduct Authority (FCA) requiring all lenders to give people and businesses repayment holidays during the current economic shutdown.
“The government’s saying we should show some payment leniency on our SME customers,” Goldin said. “Well, we’re all SMEs ourselves? How are we supposed to show leniency when no one is giving us liquidity to operate and get through the storm ourselves?”
The industry is also struggling to access the UK government’s flagship support scheme designed to help companies through the crisis.
“The alternative lenders that went to apply for the coronavirus business interruption loan — we don’t even get to step two,” Goldin said.
“Step one is: oh, our bank policy is we don’t normally lend to lenders. Well, this isn’t normal times.”
The government has set up a scheme run by the Bank of England to keep money flowing to banks and building societies but many smaller lenders have been shut out.
Goldin said the alternative finance industry had been “hung out to dry” and was at risk of being “decimated” without government support.
He added that Capify had seen “unprecedented demand” from businesses looking to borrow in recent weeks. “The industry is going to have this tremendous opportunity going forward,” Goldin said. “It’s just a question of how do you survive the storm now.”
[, Hmm... THINK that could be true in the USA, Canada, Nigeria as well?]
Ceeney said Innovate Finance “continue[s] to have productive talks” with the Treasury about possible support for alternative lenders.
A spokesperson for the Treasury said: “We’ve taken action at unprecedented speed to help businesses, jobs and our economy during this crisis – with hundreds of thousands of firms across the county benefiting from our wide package of support.
“We’re working closely with banks and industry bodies to ensure we get this support out to those who need it as soon as possible.”
