UK-based Folk2Folk, a peer to peer lender supporting local and rural businesses, has confirmed that it’s still confident that it will be approved to begin lending under the country’s Coronavirus Business Interruption Loan Scheme (CBILS), even though the application deadline will come at the end of this month (and it has still not been approved).
Folk2Folk was accredited for CBILS at the beginning of July 2020. Since then, the P2P lender has been making the necessary preparations to issue loans under the scheme.
Folkf2Folk has teamed up with Crosslend, a Germany based debt marketplace, in order to secure the institutional funding required. The lending platform has also managed to clear the relevant due diligence checks from the British Business Bank. The company has gone through a third-party audit as well, however, a representative clarified that the lender still needs to meet a few small requirements.
As first reported by Peer2Peer Finance News, a Folk2Folk representative stated that the company remains optimistic that it will be given the green light to move forward with CBILS. They confirmed that the company had discussed the matter with the British Business Bank and were looking forward to hopefully getting approval to begin issuing loans under the scheme.
The representative claimed that the lender was doing all it could to get ready to start lending under CBILS. But they acknowledged that there aren’t any guarantees that Folk2Folk can offer at this time.
“We’re transparent to customers, telling them to send applications to us by the end of September, but that we can’t guarantee to lend to them, so not to rely on us as their only source at this stage until we’re ready to start CBILS lending. We’ve seen a steady level of interest for CBILS loans, rather than a sudden rush with the deadline approaching, but there’s still time. If everything is in place, we expect to see a rise then.”
Folk2Folk’s management explained that being accredited for approval under the CBILS scheme does not mean that a lender is also ready to issue loans. That’s because they still have to fulfill other requirements.
The representative also mentioned that it was a time-consuming process, however, the company realizes that the steps are necessary in order to protect taxpayers and “it’s right for a high level of regulation to be in place.”
They also noted that Folk2Folk was currently working towards meeting the remaining British Business Bank guidelines, before they can begin lending (hopefully by November 2020).
As reported in August 2020, Folk2Folk had recommended diversifying business strategies and products so that UK firms could survive COVID-19 related challenges.