Over 100 fintech founders have been surveyed
According to Digital Finance Forum, 3/4 of UK fintechs faced the lack of the government’s support during the COVID-19 pandemic.
The research stated that a lot of fintechs are ineligible for government assistance. In fact, 37% of respondents couldn’t qualify for a government loan.
For instance, the Coronavirus Business Interruption Loan Scheme (CBILS) is unavailable to fintechs with a banking license or full-stack insurtechs. It isn’t available to those with unviable borrowing proposals as well, such as running a loss-making model.
Besides, the UK Treasury has blocked alternative lenders’ access to cheap finance from the Bank of England Term Funding Scheme. This way, it becomes harder for them to meet small businesses‘ financing needs.
For 46% of respondents, limited access to capital became their most pressing challenge. As of H1 2020, UK funding dropped by 39%, with the lion’s share went to popular players, including Starling Bank and Revolut. Consequently, small UK fintechs are faced with limited cash runway.
Meanwhile, only 25% of respondents think the government has done enough to support the fintech sector during the pandemic.
We’ve reported that 32% of UK consumers would like to see a further increase in the current £45 contactless spending limit. Among those in favor of an increase, 40% report they want the limit to increase to £100.