Firms fear losing access to top-up loans after lender Tide runs dry

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Sumary of Firms fear losing access to top-up loans after lender Tide runs dry:

  • The Guardian understands that small firms that successfully received a bounce back loan from non-bank lender Tide are struggling to secure further loans to cope with the second lockdown after the finance company ran out of funds in the summer..
  • Unless Tide can secure fresh private investment or cheap funding for loans that are only available to licensed banks, it will remain closed to new business and the small firms affected must find alternative funding..
  • The Treasury bounce back loans scheme (BBLS), which has so far doled out £40bn to 1.3m firms, has already come under fire from an all-party parliamentary group after it found that around 250,000 small and medium-sized businesses could have been locked out of the first scheme because they do not bank with any of the 28 accredited lenders..
  • “Given that many firms applied for bounce back facilities at a time when the extent of disruption was so unclear, it vital that the roll-out of the top-up initiative is a success.”.
  • Tide – a non-bank lender – managed to hand out £50m worth of bounce back loans earlier this year, but halted lending in July when it failed to secure extra funding from investors..
  • It is now reviewing formal documents linked to the scheme, and trying to figure out how it might finance the top-ups promised by the UK government last week..
  • Under the Treasury new rules, small businesses that have already received a loan– but failed to ask for the maximum allowance when they first applied – can request a top-up in light of new lockdown measures….

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