Starling and OakNorth banks have been added to the British Business Bank’s list of lenders under the CBILS (Coronavirus Business Interruption Loan Scheme).

Both Starling and OakNorth join more than 45 lenders now approved for the scheme. Their lender status was announced at the same time as approval was granted to Coutts, Queen Elizabeth II’s bank and part of RBS Group.

Starling and OakNorth are both billed as digital-only banks, providing banking services via web and app-based platforms.

Since launching its SME accounts in March 2018, Starling has become the UK’s fastest-growing business bank.

Speaking on the bank’s website, Starling Chief Banking Officer, Helen Bierton said, “Business owners…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.”

Analysis – will businesses benefit?

The CBILS was announced by the government to help businesses to maintain liquidity in the face the challenges presented by the Coronavirus pandemic.

The scheme makes a lot of sense, it will put much needed cash in the hands of businesses, removing the burden on business owners to provide personal guarantees and relieving them of the need to pay interest for an initial period.

But the scheme will only be good if the money reaches the people who need it and critically, when they need it.

If there’s one criticism that can be levelled at the traditional banks, it’s that implementing change can take too much time. Advances in digital technology have meant that access to banking products and services has improved greatly.

The introduction of two digital-only banks, Starling and OakNorth will be fascinating to watch to see how quickly and effectively they can provide the service to their customers, particularly in comparison to other banks who have already faced some criticism relating to personal guarantees.

How will Starling and OakNorth communicate their status as CBILS lenders? How quickly will they implement digital tools to enable customers to apply for and be granted funds? How quickly will they get the funds into the hands of the businesses who need them?

These are all questions that will be answered over the coming weeks and it’s sure to be a true test to see if the new breed of digital banks can keep pace with and possibly, outstrip the traditional banking giants.


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