One of the many things we're learning from the current Covid-19 crisis is that, while central government has a very important role to play in this terrible situation, it's still difficult to get things done. In the case below, the bureaucratic sclerosis comes mainly from the mainstream banks.AltFi reports on the teething problems of the Cornavirus Business Interruption Loan scheme.The UK's fintech lending industry can deploy substantial amounts of loans to small businesses to help shore up the economy, according to Rob Straathof, CEO of Liberis, who says the British Business Bank and the Government should urgently enlist their help.Under plans drawn up by the Chancellor Rishi Sunak, the Government will guarantee up to 80 per cent of billions of pounds of loans made to small businesses via certain lending institutions in a bid to help struggling firms with cheap liquidity backed by the state.Five of these lenders - including Aldemore Bank - have temporarily withdrawn from the Coronavirus Business Interruption Loan Scheme, Bloomberg reported yesterday. Others including digital bank Tide says the scheme is available through too few lenders and the scheme itself is not fit for purpose during this crisis.Among those approved for those CBILs, many of the best-known fiREAD MORE
As yet, the long-term effects on the global economy are difficult to predict. The knock-ons, though, are easier to see.There have already been a series of brutal short-term hits to the travel (notably airlines) and leisure industries. The number of pubs in the UK was already on the wane; smaller, weaker airlines such as FlyBe were already in trouble. Hard-line free-market economists might see this as a weeding out of the weak, and that the market will ultimately take care of us all.