Atom Bank, an app-based digital provider of financing to SMEs, launched its Coronavirus Business Interruption Loan Scheme (CBILS) through the Government-owned British Business Bank (BBB) in July this year.
The scheme enables lenders to provide facilities of up to £5m to smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cash flow.
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The CBILS scheme was launched on 23 March and will close for new applications at the end of September.
To date, more 60,409 businesses have borrowed £13.68bn using CBILS. However, the total number of applications for loan facilities is 122,885, which means the approval rate is less than 50%.
Although there are 60+ BBB-accredited lenders for CBILS, Atom says it is one of the very few providers to be supporting both new businesses as well as its existing customers.
BBVA, the Spanish bank, owns approximately 40% of Atom Bank.
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By GlobalDataLeasing Life spoke to Paul Elliott, head of business banking for Atom Bank, about its CBILS offering.
Q: Tell us about why you sought CBILS accreditation and the BBB application process?
A: Small businesses are the lifeblood of the UK economy and we wanted to help them succeed in this unprecedented uncertainty. Working alongside the BBB enabled us to lend more widely at a time when the UK economy needed it most.
The application process took a number of weeks and saw us submit a number of documents for assessment, crucially a summary of our pricing for CBILS borrowers, detailing how it took into account the economic benefit provided by the CBILS guarantee. We then had to satisfy a number of conditions to demonstrate we were capable of operationalising the scheme ahead of going live in early June.
Q: What can you tell us about your approach and lending profile?
A: We have seen a huge amount of interest in our secured lending proposition following our approval for accreditation from the BBB to join the CBILS scheme.
We had noted a number of other lenders restrict their offering to existing customers and this is not something we wanted to do, this approach combined with our long-established panel of commercial loan brokers resulted in Atom issuing CBILS quotes for over £480m over the last 10 weeks alone. Over 95% of this has been directed to new to bank customers.
Q: Which sectors are you targeting or active in lending to?
A: Although it’s probably hard to find a business in the UK that hasn’t had some kind of impact from the pandemic, we suspected there would be particular sectors that would be more acutely affected than others.
Perhaps unsurprisingly we have seen a much higher volume of applications from Healthcare, Food and Accommodation, Property Investment and Retail sectors.
As the CBILS scheme draws to a close all of our resources will be focused on ensuring the applications we have received complete in time and that funds make it into the hands of the businesses that need it as quickly as possible.
