Tech companies call for emergency loans to be opened up to them

A dozen of Britain’s fast-growth tech companies write to chancellor Rishi Sunak, calling for ways to keep them in business

Founders of a dozen of Britain’s fast-growth tech companies have called for government help for small business to be opened up to them.

Tech start-ups including Citymapper, Darktrace, Deliveroo and Graphcore have written to chancellor Rishi Sunak calling for a special task force to be set up to consider how to build lending schemes for companies like theirs, as well as to alter rules on emergency loans which have already been announced to accommodate them, giving them the same access as other small businesses.

The open letter reads, “We are therefore writing to ask you to urgently set up a taskforce meeting of leading tech businesses to work with you and your officials to find a way for high-growth tech companies to be able to access the lending schemes you have already established or new schemes if necessary.”

Speaking at yesterday’s Downing Street press conference, the chancellor announced that so far only 2,500 small and medium-sized businesses have been granted emergency loans by the banks.

However, the Treasury insisted that the value of credit provided to businesses has surged fourfold in the past week, amid growing calls for the government to expand its support.

The tech companies say that because they have invested in innovation and expansion over “short-term profitability”, as growth businesses they are now ineligible for the Coronavirus Business Interruption Loan Scheme emergency loans, which aims to support businesses in the black before the Covid-19 pandemic hit.

“We’re hearing reports that — despite these being ‘emergency’ loans — the application process for securing them is still very demanding,” Mike Cherry, national chairman of the Federation of Small Businesses, told The Times. “Of course lending can only be made to viable businesses, but banks need to understand that time is of the essence.”

Staff overwhelmed

Part of the problem is that high-street banks have been overwhelmed by applications, with call-centre staff working from home, and banks prioritising existing customers over applicants who bank with fintechs, such as Tide.

Open up emergency loan scheme

Also writing in today’s Times, former Treasury secretary Baroness Morgan, has called for the British Business Bank-administered CBILS to be opened up to fintechs.

“We have an amazingly innovative and successful financial technology sector, bursting with ideas about how to keep small companies in business,” Baroness Morgan, the former culture secretary, writes. “The British Business Bank, Treasury and Bank of England need to be open to the fact that fintech companies often operate in a way that is outside the traditional mould but which does bring its own efficiencies.”

However, even though BBB has been in talks with new fintech lenders such as OakNorth, it too has staffing problems, with fewer than 50 employees assessing the raft of loan applications now pouring from CBILS lenders.