How Starling Bank is Helping Out UK SMEs

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During times of crisis some organisations go quiet, others come to the fore in trying to help with the solution.

The Covid-19 crisis has hit British business and the UK economy. However, challenger bank Starling have been at the vanguard of supporting SMEs through being accredited as a CBILS lender.

The government-backed Coronavirus Business Interruption Loan Scheme (CBILS) is central to the Chancellor of Exchequer, Rishi Sunak’s measures to keep UK PLC afloat. This specific element will enable it to provide term loans between £5k and £250k to small and medium-sized enterprises (SMEs) that are struggling financially as a result of the coronavirus emergency. Starling will shortly confirm the date from which it will be ready to start receiving CBILS applications.

Under CBILS, the first 12 months of interest on the facility and any arrangement fees will be paid by the UK government as a Business Interruption Payment. This means smaller businesses will benefit from no upfront costs and lower initial repayments.

No personal guarantees will be required, so borrowers and guarantors will not have to put up their principal private residence as security.

SMEs with an annual turnover of up to £45 million can apply for a Starling CBILS term loan, if they meet all of the following criteria:

  • Limited Company or Limited Liability Partnerships
  • Trading for more than 18 months
  • Have a good credit history with no arrears or defaults

Starling is also offering business overdrafts of £1k to £150k under the Scheme, with Sole Trader businesses also eligible to access a business overdraft up to £10k.Loans are available for terms of up to 5 years. Overdrafts are a revolving credit facility, and renewable annually.

SMEs will be able to apply for CBILS loans via the Starling website.

Helen Bierton, Starling Bank’s Chief Banking Officer, said,“Business owners who have poured their heart and soul, not to mention their life savings, into successful enterprises are crying out for help. The important thing now is to get money into their hands. We believe that CBILS is the best way to do this. We’re delighted to be working with the British Business Bank as a CBILS lender.”

This is not the only support Starling is giving to businesses during this crisis. As I found out when I emailed their communications lead Alexandra Frean, last week, who gave me a list of things Starling is doing to support organisations through this dark time. They include:

  • Creating a business support eligibility tracker for limited companies and sole traders on their website to help their business customers, including sole traders, understand what financial support they are entitled to during the outbreak.
  • Launching a cheque deposits via their mobile app . Customers can now pay in cheques using their Starling banking app. Cheques up to £500 can be deposited by business and personal customers by taking a photo on their smartphone and uploading it via the app, allowing for easier home banking. Thinking of their customers when it comes to social distancing!
  • Creating a dedicated coronavirus information hub on their blog.

Anne Boden and her team continues to be at the vanguard of doing the right thing at the right time; seeing the importance of supporting their client base through choppy waters. It is clear that Starling is trying hard to support UK business and by close association UK fintech.