How to invest in SMEs through the CBILS
As a proudly accredited lender, we can provide revolving credit facilities and business loans under the Coronavirus Business Interruption Loan Scheme (CBILS). We believe that being accredited is well-deserved recognition from the government of our strong position as a business finance provider.
But behind every business loan or revolving credit facility we offer, are investors supporting that business. It’s our goal to connect these two communities via our smart online platform – and to ensure businesses are getting the funding they need while allowing investors to lend for an attractive return.
Taking into account the current climate, we’ve outlined what being an investor through MarketFinance looks like right now:
As per the guidelines set out by the British Business Bank and UK government, only institutional investors† can invest in the CBILS.
The CBILS allows SMEs to apply for up to £5 million in funding through MarketFinance, repayable over up to 3 years. While the borrower remains 100% liable for the debt, the scheme provides institutional investors with an 80% government-backed guarantee against the funds advanced. We expect to deliver net returns of ~6% to investors, offering an attractive risk/return dynamic.
We’ll open for applications in the next few days and have already seen a positive response from SMEs registering their interest ahead of the official launch. Since our state-of-the-art risk model uses thousands of data points, it allows us to make fast risk decisions and get much-needed funding to these businesses very quickly when we go live.
We’re continuing to offer our existing funding solutions – and where investors don’t meet the criteria for CBILS, we still have a lot of other investment opportunities. In fact, due to the increased awareness post-accreditation, we’re expecting to see an increase in businesses looking for funding options, not just through CBILS.
Investors through our platform†† have the opportunity to grow their portfolio at higher rates than traditional investments because of our short duration and flexible products. In addition, our expected net yield across our portfolio (non-CBILS) is 9% p.a. And there’s no minimum investment lock-up period so investors can easily withdraw uninvested funds at any time or even reach out to their dedicated account manager to talk it through.
We’re having a lot of conversations with UK businesses right now who are looking for funding. And we want to bring investors into those conversations so that together, we can step up and support the backbone of the UK – our SMEs.
If you’re an investor looking to support SMEs through the CBILS or other investment opportunities, get in touch with our investor team at firstname.lastname@example.org.
We’ll work with you to create a customised and diverse portfolio that fits your investment needs and ensure we’re maximising your investment to better the future of UK business.
†An institutional investor is a company or organisation that invests money on behalf of other people. Some examples of an institutional investor include corporate and local pension schemes, asset managers, foundations and corporate banks.
††Accredited institutional investors, family offices, certified high net worth individuals, and self–certified sophisticated investors are eligible to invest on the MarketFinance platform.