Commercial Broker (NACFB Magazine) September 2020

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Ask the Expert

How the British Business Bank rose to the challenge

Q& A Patrick Magee Chief Commercial Officer British Business Bank

How has the role of the British Business Bank changed in 2020?

We are a government-owned business development bank, established in 2014 to help drive economic growth by making finance markets work better so smaller businesses across the UK can prosper and grow. This year’s coronavirus crisis expanded our role to directly support the government’s COVID-19 emergency response for small business, whereby the Bank set up, at pace, four different business loan schemes to provide finance to different types of businesses which to date totals almost £52 billion.

What were the first few months of coronavirus like at the Bank?

Like many organisations we had to manage the practicalities of operating in lockdown. Colleagues moved from our Sheffield and London offices to work remotely, with everyone doing their day jobs from home. Responding to COVID-19 then meant round the clock video conferences as we helped the government to deliver these loan schemes from scratch.

What challenges have you faced facilitating over one million loans to SMEs?

I think it was a challenge the Bank rose to, 20 | NACFB

but from a lending perspective, we had to set up a new accelerated system for our lender accreditation process. This enabled us to sign up over 145 lenders across three schemes. Those accredited include PRA-regulated banks, platform lenders, debt funds, invoice finance lenders, asset finance lenders and responsible finance lenders.

How have you seen commercial brokers play their part?

Some of the lenders on the scheme are dependent upon commercial brokers for the origination of loans, often serving businesses or sectors where access to finance might otherwise be more challenging. The pace and quantum of deployment of loans, asset and invoice finance through these lenders is a testimony to the role the brokers have played.

How has the Bank sought to combat fraudulent loan claims? We set up a weekly Fraud Prevention Collaboration Working Group co-hosted with UK Finance and Cifas, where accredited lenders share their experiences, discuss fraud levels, highlight best practice and explore industry-wide solutions.

Many SMEs will have borrowed for the very first time, do you think attitudes to finance will change?

These business loan schemes have given a lifeline to UK businesses helping them access essential capital. Businesses will be looking to see how the economy responds

and how they can keep trading. They will also be aware that they have taken on debt through these loans, and they are liable for repaying them.

How will we see the three main loan schemes evolve in the coming months?

Both the Coronavirus Business Interruption Loan Scheme (CBILS) and CLBILS will initially be open until 30th September, and the Bounce Back Loan Scheme (BBLS) will initially be open until 4th November. We are continuing to accredit new lenders who can offer loans to businesses under the schemes.

What refinancing challenges could be faced, and how can brokers help meet them?

There may be increased demand from businesses to refinance existing borrowing arrangements or support business investment through increased asset finance. Brokers can ensure that businesses are introduced to the right lenders to help them get the package of finance they need to ensure their continued and sustained viability.

Is the Bank now better prepared for future unforeseen economic crises?

The Bank has always had the ability to take on new responsibilities while enabling ever greater supply and diversity of finance. This crisis has shown we can support the government’s agenda and execute new programmes quickly and effectively.