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Tide pauses Coronavirus lending as funding falls through

Tide pauses Coronavirus lending as funding falls through

Business banking startup Tide is to freeze lending under the Government's Bounce Back Loan scheme after failing to win funding to finance the financial assistance packages.

In an open letter to customers, Tide CEO, Oliver Prill, states: "Over the last month, my team and I have been working with a number of financial institutions to secure funding to lend through the scheme. However, the design of the Government’s Bounce Back Loan Scheme doesn’t meet the requirements of our prospective funding partners to be able to provide the funding for us to lend to you."

While the loans provided through the scheme are 100% guaranteed by the Government, it is up to individual banks to draw from their own resources to finance the lending.

"The way the Bounce Back Loan Scheme is set up makes it very easy for banks with large pools of funding available, but not for fintech companies like Tide," says Prill. "Therefore, we’re in conversation with our contacts at HM Treasury about the Government providing the necessary funding for the Scheme directly to lenders, rather than lenders sourcing capital from investors or other financial institutions."

Tide campaigned heavily in the early days of the pandemic for accreditation to the BBL scheme and set up a waiting list for customers to register for the loans.

Prill doesn't divulge the number of customers on the list, but writes: "We do know that many of you were counting on Tide. We’re very sorry that on this occasion we couldn’t rise to this challenge and meet your expectations. Please do consider signing up or applying for a loan with another accredited lender​."

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