A major lender to tech firms, the bank faced "inadequate liquidity and insolvency" as it scrambled to raise money to plug a loss from the sale of assets affected by higher interest rates, according to banking regulators in California. Its struggle set off a series of customer withdrawals and sparked fears for the wider banking sector.

The bank's UK branch was put into insolvency from the evening of Sunday 12 March but swiftly rescued by HSBC for only £1 in a move praised by Krista Griggs, Head of Financial Services & Insurance at Fujitsu. “The UK technology industry is thriving and it requires a commitment to long-term success if the country is going to achieve its ambition of becoming a scientific and technology superpower," she said in a statement.

“HSBC’s fast response is a welcome move that will ensure continuity for businesses at risk from the collapse of Silicon Valley Bank. It shows commitment to innovation and I expect to see more involvement from traditional banks as they look to provide stability during disruption - as well as further union between them and FinTech companies as this sector continues to rapidly evolve."

When looking at how to budget for a personal loan, tools such as a loan payment calculator can be a great first step to checking loan affordability, but that's not the only factor to consider. 

Personal loans can be a great way to borrow a large sum of money, but you need to make sure that the repayment plan fits your budget for it to be a good financial decision.

How much do you need to borrow?

Personal loans can be taken out for a variety of reasons, but generally speaking, they are used to pay for and spread the cost of a specific event, such as a wedding, or an expense, such as an unexpected medical bill that you wouldn't otherwise be able to afford at that moment. 

Before applying for a loan, you should have a figure in mind for the amount you need to borrow; that way, you can easily compare different interest rates and terms to see which offers you the best value.

How much can you afford to pay back? 

The overall amount of money you pay back will be that initial sum borrowed plus interest. This is why it's important to only borrow what you need; anything more could result in higher monthly repayments or taking it over a longer-term, meaning more paid in interest.

You need to look at your personal budget and come up with a realistic amount that you can easily afford each month as a repayment. It may be tempting to opt for a higher repayment amount so that the loan is repaid quicker, but if it’s not easily manageable, you could run the risk of defaulting on a payment which could then incur fees or hurt your credit.

Getting a fixed interest rate

The interest rate on your loan is the periodic finance charge you pay to borrow the money. If you always pay on time, the monthly instalment is calculated to cover your accrued interest and pay down a small portion of your principal balance. When you are looking for a personal loan, it is good to find one with a fixed rate of interest, as this means that your repayments will stay the same for the entire term of the loan. 

You might see variable interest rate loans advertised with special offers such as having a ‘fixed low rate for x number of months’—often called an introductory or ‘teaser’ rate. While this might sound like a good idea initially, the monthly repayments can jump and change month to month as soon as the fixed-rate term runs out. This makes it more difficult to budget successfully and runs the risk of some months being more than you can afford.

The bottom line

The best way to budget for a personal loan is to look at your expenses and find a comfortable amount that you have readily available each month to put towards the repayments. Once you have this, you can use the tools provided by reputable lenders to run the numbers on the amount you need to borrow and see what term you would need to take the loan over to afford the repayments. 

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For example, over the COVID lockdowns, business lending in the EU increased by an average of 5.3 per cent, with banks struggling to keep pace with the steep increase in demand. With a recession looming we can expect another increase in business loan applications and financial institutions need to be prepared.

Over the coming months, lenders will need to move fast to process these increasing loan applications. But not all will have learned the lessons of the pandemic and invested in the digital infrastructure that allows them to scale and pivot at pace.  The laggards need to move now, employing up-to-date technology and automation solutions so they can work faster and more efficiently. Otherwise, customers will vote with their wallets and look elsewhere for their banking needs.

The cloud’s silver lining

The first step for banks looking to boost digital innovation is a shift to the cloud.  Today’s customers expect banking processes to be as easy and efficient as online shopping. This can only be achieved through the scale and agility provided by cloud technology. 

Cloud computing provides lenders with secure and agile infrastructure on which they can more easily streamline business processes, deploy new solutions and enable innovation to meet the speed at which customer expectations evolve. For banks looking to ready themselves for an increase in loan applications, cloud infrastructure will let them automate many parts of the customer journey, from application and KYC, through to approval and account management. For example, Cynergy Bank’s use of identity verification automation through its cloud-based platform cut onboarding time from three days to 54 seconds.

Another benefit of using cloud-based systems is the ability to scale more easily. Traditional banks’ legacy architectures make continuous evolution more difficult, as upgrading hardware is often both time-consuming and expensive. In contrast, cloud technology, often used by neobanks, is far nimbler, with the concept of growth an inbuilt characteristic. 

Keeping pace with the customer

Customer-centricity should be the ultimate priority for any bank, whatever the economic climate. It is no longer enough to be able to access banking amenities from your sofa, they need to be available 24/7 and easier to navigate than ever before.  

People say that television killed our attention span, but the pandemic finished off our patience.  

The good news is that, in the UK, banks have already invested in the cloud infrastructure to stay ahead of customer expectations. For example, Yorkshire Building Society knew that to maintain strong customer relationships it needed to move away from manual processes and allow employees to be more efficient. A shift to the cloud has enabled the organisation to become 90% paperless with staff spending less time searching for information on spreadsheets and more time accelerating customer service. This change has seen the Commercial Lending Department reduce the amount of time it takes to produce offer letters and facility agreements for customers by 75%.

Similarly, Santander UK has been able to use cloud computing and digital tools to stay ahead of customer expectations. Technology investment has enabled faster loan origination and decisioning, ultimately improving the overall customer experience.

This speed of service will be critical as banks scale up to better support customers over the coming downturn. However, it is not too late for those who have not yet embarked on the digital journey. Cloud solutions can be seamlessly implemented within a short period of time; start now and you and your customers will soon reap the rewards.

About the author: Thomas Chaplin is Head of Mortgage Product at nCino, EMEA.

What is a signature loan and what are its benefits over other types of loans available to consumers?

A signature loan is a type of unsecured personal loan that does not require collateral. This means that you do not have to put up any assets, such as your home or car, in order to secure the loan. Signature loans are typically smaller than other types of loans, such as mortgages and auto loans, and have shorter repayment terms. Signature loans also tend to have lower interest rates than credit cards.

There are several benefits to taking out a signature loan

• You can use the money for any purpose - there are no restrictions on how you can spend the funds from a signature loan.
• Signature loans can help you build your credit score - timely repayment of a signature loan can help to improve your credit score.
• You can get a signature loan even if you have bad credit - because signature loans are unsecured, you may be able to qualify for one even if you have bad credit.
• If you are considering taking out a signature loan, it is important to shop around and compare rates from different lenders. Payday Champion can help you find the best signature loan for your needs.

How does the process work? Do you need good credit or can anyone apply?

Signature loans are unsecured, which means that they do not require collateral. This makes them a good option for people with bad credit, as they may not be able to qualify for other types of loans. The application process for a signature loan is typically much simpler than that of other types of loans. You will likely just need to provide some basic information, such as your name, address, and Social Security number.

In order to get the best rate possible on a signature loan, it is important to have good credit. Lenders will use your credit score to determine whether or not you are a good candidate for a loan and what interest rate to offer you. If you have bad credit, you may still be able to qualify for a signature loan, but you will likely have to pay a higher interest rate.

How much money can you borrow and for how long?

No credit check signature loans are available in amounts from $100 to $5000. The repayment terms vary depending on the amount you borrow, but they typically range from two weeks to four months.

If you need a longer repayment period, you may want to consider a personal loan from Payday Champion. Personal loans have repayment terms of up to five years, so you can spread out the payments over a longer period of time.

What happens if you can't repay the loan on time?

If you are unable to repay your signature loan on time, you may be charged late fees. In addition, your lender may report the late payment to the credit bureaus, which could damage your credit score. If you think you will be unable to make a payment, it is important to contact your lender as soon as possible to discuss your options.

Mirek Saunders, who manages an online payday loan website, suggests that "A signature loan can be a great tool to help you consolidate debt, make a large purchase, or cover an unexpected expense. But as with any loan, it is important to understand the terms and conditions before you agree to borrow money."

It means that Market Financial Solutions (MFS), which celebrated its 15th birthday in October 2021, is something of an elder statesperson in the bridging sector. More than that, this milestone also presents an opportune moment for reflection and what is a curious time for both the bridging and property markets.

Bridging market grows at pace

It makes sense to first establish the growth and evolution of the property market since 2006 when myself and the MFS co-founders first began providing bridging loans. Back then, there was just a small group of lenders operating in what was a relatively niche, unknown corner of the alternative finance sector. In truth, the bridging sector suffered from a poor reputation, with the loan shark imagery haphazardly attached to short-term lenders. Positively, however, over the past 15 years, this misconception has been challenged, with bridging finance becoming more and more popular, particularly among property investors.

A key turning point came in 2007 with the onset of the global financial crisis, which naturally had a significant impact on all types of lenders. For bridging loan providers, the credit crunch that followed presented a significant opportunity; banks quickly became more risk-averse and, in short, more reluctant to lend – products were pulled and the criteria that borrowers had to satisfy became more extensive, not to mention more rigid. Bridging lenders were on hand to fill the gap, providing specialist solutions to those unable to access traditional credit lines.

Since this point, we have seen impressive, sustained growth. Estimates suggest gross bridging lending in the UK stood at around £400 million in 2010; by 2019, this figure had reached £4 billion. And while the pandemic did result in an almost inevitable dip in lenders’ loan books – given the property market ground to a halt for around a third of the year – the signs since late 2020 have been positive, suggesting that the market has begun to expand again.

Bridging becomes more diverse and creative

The above narrative is, of course, an oversimplification of how the bridging market has changed since 2006. Yes, it has grown significantly in terms of both the number of lenders that are active in this space  and the volume of deals being completed. Of more interest, though, is the way in which bridging products themselves have changed. Indeed, at MFS, the difference between our product range during our early years of lending compared to today is stark. It is a trend that has been seen across the industry.

Residential, semi-commercial, commercial; first-charge, second-charge; auction finance; buy-to-let (BTL) products; hybrid loans; development exit; refinancing – there are almost too many types of bridging loans on offer today to list. But it is positive to note just how creative and diverse bridging lenders have become in creating specialist solutions for all manner of clients and the potential complex circumstances they find themselves in.

To that end, the bridging industry has also had to adapt to some challenges related to reform and regulation within the UK property market. The changes that have taken place relating to BTL investments perhaps best exemplify this.

An additional 3% stamp duty surcharge was introduced in April 2016 for second-home purchases. A year later, the Government introduced a tapered reduction in mortgage interest tax relief – BTL landlords now receive a 20% tax credit, meaning those paying basic rates will be unaffected, but landlords who pay higher and additional rates will be charged more.

In 2018, changes were introduced for houses in multiple occupation (HMO) standards, which resulted in many landlords carrying out significant refurbishment and renovation works within their property portfolios. Then, of course, the pandemic arrived in 2020 – this saw many tenants placed on the Government’s furlough scheme, which was set up to protect businesses and employment rates. To help protect financially-affected tenants, the Government introduced The Coronavirus Act 2020, which protected tenants by delaying landlords’ ability to evict. Landlords had to provide six months’ notice before starting the process.

Bridging loan providers have had to evolve in line with these changes and challenges, thereby ensuring they can support BTL landlords, which are key clients for many of the lenders. Products have been introduced and revised to enable property investors to manage and adapt their portfolios effectively. Similar examples can be seen in the ways that bridging firms have assisted businesses, international buyers and property developers by establishing new solutions tailor-made to their particular needs. For me, this is the main story of how the bridging sector has evolved since 2006 – not simply growth, but innovation and improvements. 

Speed and flexibility remain key

Since MFS was founded, we have witnessed the global financial crisis, multiple recessions, Brexit and the Covid-19 pandemic; there have been five Prime Ministers and a vast amount of regulatory and legislative reform in the property market. Clearly, it has been a turbulent period; the wider political and economic landscape has been reshaped several times over. 

Through it all, two qualities have remained integral to the success of bridging lenders: speed and flexibility. And the pandemic – or, more specifically, the stamp duty holiday – illustrated just how important both factors are.

It goes without saying that the SDLT holiday triggered a huge uptick in activity across the property market; data from the Office for National Statistics shows that UK average house prices increased by 10.6% over the year to August 2021 as a result of increased demand among buyers, something that made the market fiercely competitive.

In the face of such strong competition, property buyers needed to act fast – delays in accessing finance, which became common as mortgage providers struggled to satisfy the increased demand for loans, could often result in a buyer losing out to a rival bidder. In many instances, bridging lenders stepped in.

The fact that bridging loans can be delivered in a matter of days, rather than weeks or months, has long been one of their defining features. During the stamp duty holiday, this speed became not just attractive, but essential – it was the difference between completing a deal, meeting the deadline and preventing any untoward gazumping. Similarly, flexibility is a critical reason for the increased use of bridging loans. There are simply many clients – such as BTL landlords, international buyers, high net-worth individuals and property investors – whose financial profiles and wealth structures are deemed too complex for traditional lenders. With fewer regulatory restrictions, bridging providers have the ability to be more flexible when assessing enquiries, which means they can serve parts of the market that are otherwise not adequately catered for. 

Reflecting on the past 15 years, the growth and evolution of the bridging market has been impressive. Put simply, the industry is far better established and, in general, lenders are acting with greater maturity in the way products are devised and delivered. 

As ever, though, there is no room for complacency – as the UK’s lending and property markets adapt and change in the coming years, so too must bridging firms to ensure they remain relevant and can meet the needs of clients. Given the evidence I have seen to date, there is every reason to think that the best lenders will take up this challenge. 

About the author: Paresh Raja is the founder and CEO of Market Financial Solutions (MFS) – a London-based bridging loan provider. Prior to establishing MFS in 2006, Paresh worked as a senior professional consultant in one of the top five management consultancy firms, and also set up an independent investment group.

Can you tell us a little bit about the way the pandemic affected you and your businesses? 

I think the pandemic was an intense obstacle for most businesses and business owners. For my companies, I quickly changed my mindset from being shocked and grappling with this whole new world to thinking about how I could adjust to better serve my clients, employees, and community.

The pandemic created unprecedented needs for our clients and with all the restrictions and safety concerns, we had to be very agile in creating client-focused solutions. All told, I think Postema Insurance & Investments grew well above 50% in 2020.

What were the main challenges you were faced with and how did you manage to overcome them? 

The first challenge was in rethinking how I could keep my employees and clients safe. The safety of those around me has always been important, but there was a new threat to consider with the pandemic.

With that handled, I had to decide how to keep my business operating smoothly so I could meet customer needs despite potential employee absences. We had to stay extremely organised and do a lot of cross-training while maintaining company ethics and service standards as our clients’ need for sound financial advice continued to grow.

What are some of the key lessons the past year and a half have taught you? 

It’s made me think a lot differently about my weaknesses. I realised how important it is to hire people who can do what I can’t, rather than just trying to do it all myself.

I’ve also learned how important it is to work on total and complete life management, not just time management. I’ve found that if I continue to follow a path of self-improvement, my entire team and all of my organisations will improve as well. If we want to change the world and make it a better place, we must first make ourselves better.

Tell us about your new company, Postema Capital Lending.

Ultimately, I have always wanted to add a lending component to my financial services organisation. The pandemic not only gave me the time to implement Postema Capital Lending but also pointed out just how necessary this service was. I strongly believe that financial planning isn’t just about accumulating wealth. It’s also about preserving your wealth and property with insurance, rigorous tax planning and strategic borrowing that’s easy to access from lenders all over the country. With the capital lending component, my company comes full circle. Our clients enjoy a full financial planning team meeting all of their financial needs, and it’s all in one place, making it easier for clients to manage.

What are your goals for the future of Postema Capital Lending? 

We are experiencing rapid but controlled expansion, so we’re focusing on opening satellite offices for captive sales associates and others. The Postema Capital Lending team is amazing. With Julie, Jodey, Kevin, Dustin and Abby running our home team in tandem with our accounting company, we’re seeing exponential growth in our list of lenders. We’ll soon have over 900 lenders available to help borrowers all over America get the right lending option. Ideally, we’d like to become the first place both borrowers and Loan Originators turn to.

Considering how much you’ve got on your plate, what are the strategies you implement to find time for everything?  

It really starts with the team that’s supporting me. We have to work together with a shared vision, ethics and goals. Once that’s taken care of, the rest is just a psychological battle. I’ve mentioned this in other interviews, but being a driven, hard worker can be both a blessing and a curse. But once you realise that your potential is limitless, it stops being a question of how you will manage everything; you just know that you will.

What does a typical day look like for you? 

I’m typically up and working out by 5 am. I get to work by 7 am so I can get ahead of everyone else. Keeping each company structured and running requires a full day of appointments, meetings, podcast recording and television interviews.

Ideally, I’m home by six and enjoying dinner and family time. From 8:30 pm to 11:00 pm I enjoy what I call my Prime Time. This is when I’m usually journaling in my victory journal and gratitude journal and working on book, program or website content. Before bed, I review my goals and plan my day so my subconscious mind can sort everything out and organise it by morning.

What are your top tips on motivation, productivity and successfully juggling a lot of things at once? 

I make sure that throughout the day, I’m constantly “filling my cup.” In other words, I’m getting spiritually, emotionally, and psychologically renewed all day by making sure I’m always immersed in some form of self-improvement. I never want to be the same person tomorrow that I was today. I want to constantly grow and evolve so I can better my life and the lives of those around me.

The problem is, it can be quite hard for small businesses to get external funds since most traditional lenders are reluctant to invest in them. Because, unlike large companies, they don’t have the equity and resources to compete in the market. But thanks to the emergence of fintech or financial technology in the last decade. With fintech developments, small businesses have more opportunities to scale up and thrive by making financing from lenders more available to them.

Trustworthy lenders can help you with this matter. To further understand its impact, find out below how it expands the financing options of small business owners. 

Develop New Approaches For Credit Analysis

Most conventional lenders like banks and credit unions heavily rely on the old credit scoring system when making lending decisions. As a result, small businesses with a limited or no credit history find it too difficult to get loan approval. But fintech has made it possible to expand credit availability by developing new approaches in assessing creditworthiness.

Through machine learning technologies, lenders have a pool of data to support their decision-making. Factors like financial situation, spending habits, and professional background are analysed by the machine to come up with the applicant’s behavioural profile. This gives small business owners more chances to prove their creditworthiness towards the lender. 

Simplify Loan Application Process

Small businesses are often viewed by banks and credit unions as risky borrowers. It’s one of the main reasons why they usually require multiple in-person interactions before approving their loan. Plus most of them used manual and paper-based loan approval that normally takes several weeks and even months. 

On most occasions, such a lengthy process results in a low approval percentage for small business loan applications. Fortunately, fintech provides easy-to-use online applications, allowing small business owners to apply for loans at their convenience and get faster approval. With rapid loan underwriting, small businesses can navigate and understand their financing options much better. 

Provide Credit Directly

Drawn-out application processes and high fees have held back many small businesses from securing short-term loans. Such limitations are impacting the cash flow of thousands of companies. But the need of small business owners to access fast credit is largely recognised by fintech. 

With fintech’s advanced loan origination software, online lenders that offer quick cash loans, bad credit payday loans, emergency loans, etc. don't only improve their credit assessments but the process of their loan disbursal as well. They can already provide loans to small business owners using direct money transfers and enforce repayment terms through an online platform. 

Create Alternative Forms Of Financing

The fintech industry has undoubtedly provided multiple ways for small business owners to grow and expand. With better automation, speed, precision, and the possibility of lower interest rates, it brings various lending solutions to small businesses and even startups. Below are some alternative forms of financing they have created. 

Peer-To-Peer (P2P) Lending

P2P lending is a painless way to get financing with quick disbursals and easy repayment methods. Through automated algorithm-based pricing and underwriting, P2P lending platforms screen all types of borrowers more accurately and match them with the most suitable lender. So even with shorter credit histories and lower scores, small businesses can secure financing. 

Invoice Factoring

With accrued late payments, the working capital of small businesses might take a hit. But fintech has made a way to invoice financing technologies to help increase the liquidity of companies suffering from late-payment problems. With a web-based portal, small business owners can get advances from an invoice finance company. They can upload their invoices in real-time and have the amount deposited in their bank account. 

Merchant Cash Advance

Small businesses can also get an advanced lump sum of money based on their future credit card sales. They can repay the advance by taking a fixed percentage of those sales until the whole amount is paid back in full. With fintech streamlining the process of credit assessments and setting up dynamic repayment schedules, small businesses can keep their margins and profits still intact. 

CrowdFunding

With fintech innovation, multiple crowdfunding platforms allow entrepreneurs to fund their small businesses through a variety of people who want to get involved with their business campaigns. Depending on the type of crowdfunding, small businesses may have to repay the fund or compensate in the form of equity. But besides raising funds, the best part about crowdfunding platforms is giving entrepreneurs opportunities to reach out to potential customers.

Leverage Fintech Innovation To Grow Your Business 

Fintech development doesn’t solely make outside financing more accessible to small businesses. It can also help you manage all your financial needs and transactions more efficiently from online lending to accounting and invoicing. You can have an edge over your competitors by leveraging fintech innovation in your daily business transactions and operations. 

At the same time, UK firms borrowed more than £100bn last year. While this was predominantly driven by government-guaranteed lending, demand for borrowing is likely to remain strong as SMEs recover and government schemes are withdrawn. Many will return to non-borrowing ways but there is also a case for businesses who may have had their first taste of borrowing and will seek finance to thrive rather than survive - particularly as the cost of borrowing remains relatively low.

Other forms of lending will come to the fore to supplement mainstream solutions such as overdrafts and term loans - asset-based lending is one such model set to play a significant role in offering support to businesses. To meet the rising levels of demand, lenders should be prepared to leverage their digital capabilities to streamline customer journeys, improve risk mitigation and enhance transparency between lender and borrower.

Operational excellence: customer experience and business value

The demand for lenders to create frictionless digital journeys for their customers was growing well before COVID-19, but there is no doubt that the need to streamline communication and digital interaction between lenders and borrowers has become increasingly important and is often the preferred channel for many businesses. With the advent of cloud computing and the drive to greater transparency, led by the Open Banking initiative, the business community is more minded to share data with trusted partners.

But leveraging digital capabilities to improve customer journeys goes beyond just enhancing the customer experience and while borrowers benefit from faster access to working capital, lenders themselves are better able to reduce risk and make informed judgements about the businesses they lend to. For lenders, the access to enhanced data provides superior insight into how they can support customers now and, in the future, and ultimately improve margins.

By utilising online solutions that allow clients to self-serve their funding needs, lenders can achieve excellent operational efficiencies and high levels of customisation, also delivering reliable and secure solutions that offer customers a better overall experience and financial support at the click of a button.

Greater visibility driven by open accounting

In an increasingly data-driven world, lenders are looking towards “open accounting” to provide greater visibility on the financial performance of the businesses to which they are lending. Lending decisions can be made much more quickly by an asset-based lender if they have the trading history of the borrower, with full transparency of sales, purchase ledgers and cash movements at their fingertips.

Open accounting can provide information vital for the lender to manage risk and optimise the funding available. Checks and assessments are completed in a fraction of the time, and with much less friction than with manual processes. Lenders who have access to their clients’ accounting data are in a far stronger position to streamline operations and deliver customer satisfaction.

A modern solution 

Taking advantage of such digital capabilities offers clear appeal to asset-based lenders, but they must ensure they deliver holistic solutions to meet their needs and customer demands, rather than delivering quick fixes which overlook the overall experience and entire digital infrastructure.

By utilising online solutions that allow clients to self-serve their funding needs, lenders can achieve excellent operational efficiencies and high levels of customisation, also delivering reliable and secure solutions that offer customers a better overall experience and financial support at the click of a button.

Overall, digitalisation has been both a natural solution to reducing friction and increasing efficiency for lenders and clients alike and a key tool in dealing with the intense demands placed on lenders during a challenging economic cycle.

In an increasingly competitive environment lenders need to continue providing advanced digitalisation offerings, such as ever-evolving streamlined journeys which build trust, speak to customer needs, and accelerate outcomes, and look to leverage open accounting to enhance insight into business performance and inform lending decisions. This evolving digital landscape is a benefit to lenders and borrowers alike as they tackle the challenges of a post-pandemic future.

You may have a situation where all you need is a small amount of money for a short period and you don’t want the hassle of too much paperwork, credit checks and having to provide collateral. 

In some situations, this simply isn’t practical, such as when you need to unexpectedly make car repairs or have some emergency dental work. In circumstances like this, applying for a payday loan may be your best option. Here are five good reasons to apply for a payday loan. 

1. Receive money quickly for an emergency

Same-day payday loans can be a good way of borrowing if you need a rapid injection of cash into your account for an emergency. A payday loan from Moneyboat can help you if you borrow only what you need and pay it back as soon as you can. It doesn’t take long to approve a payday loan and you can have funds in your bank account within 24 hours. 

This can be incredibly helpful in certain situations. If your car breaks down and you can’t do without transport, you can take out a payday loan without having to provide collateral or go through a credit check. 

When you quickly have cash in hand to pay for the repairs, there are no delays and you don’t have to suffer any of the negative consequences of not having transport, such as not getting to work on time. 

2. Enjoy the convenience of online application

When you’re faced with unexpected expenses, you want the easiest and most convenient way to access money. Many online lending businesses operate online and you can make use of their services 24/7. 

It is possible to get a payday loan online for an amount that usually ranges from about £200 to £1500. You will also typically have access to a personal online account where you can log in and see what you owe and your repayment dates.

Setting up automatic payments online can be convenient. Signing a continuous payment authority (CPA) means the lender can automatically take money from your bank account. 

If there isn’t enough money in your account to repay the loan on the due date, lenders can add late payment charges and try to get part payments. Reputable lenders won’t use a CPA more than twice because they realize how much financial stress this puts on borrowers. 

3. Face no restrictions on how to use the loan 

Many loans require you to state how you’re going to use your money but you don’t need to do this when you apply for a payday loan. Payday loans come with a time constraint and if you act responsibly, you can use the money however you want to use it as long as you pay it back on time. 

Some people will use payday loans to buy expensive gadgets or take holidays, while others will use them for emergencies and unexpected expenses. It’s best not to use payday loans for items you can’t afford, especially if they aren’t a necessity. However, if you can’t pay your utility bill and you don’t want to have your services disconnected, a payday loan could tide you over and give you the help you need when you need it most. 

4. Receive protection with fee and interest rate caps

There are those who complain about the high interest rates of payday loans but you need to keep in mind that lenders have to be compensated for the risks they take. The less they know about you, the more risks they face that they won’t get their money back. 

The Financial Conduct Authority (FCA) limits the amount of interest lenders can charge. If you pay back your loan on time, the cap on fees and charges helps to protect you. Daily interest and fees cannot exceed 0.8% of what you borrow and default fees can’t be more than £15 in total. Licensed payday lenders also have to clearly disclose their terms and conditions and if you read them, you will be aware of your responsibilities. 

5. Don’t miss a monthly payment with high interest rates and fees

A short-term loan could prevent you from missing a monthly payment which results in paying more interest fees and charges than you would on your payday loan. This can happen with things like credit card debt which attracts high interest rates. Making your credit card payment on time could help you to save yourself from extra fees and high interest rates charges. 

This won’t work if you don’t pay back the loan in time. If you don’t pay it back in time, the payday lender could offer you an extension or rollover, whereby you make a new agreement but this means you will have to repay more money in interest and extra fees.

US Treasury Secretary Steven Mnuchin said on Thursday that several key pandemic lending programmes at the Federal Reserve would not be renewed, putting the outgoing Trump administration at odds with the central bank.

In a letter to Federal Reserve Chair Jerome Powell, Mnuchin asked the Fed to return $455 billion allocated to the Treasury under the CARES Act in March, much of which was earmarked as funds for pandemic relief lending to businesses, non-profits and local governments. The Fed has deemed these programmes vital to the continued stability of the US economy through the winter.

“I was personally involved in drafting the relevant part of the legislation and believe the Congressional intent as outlined in Section 4029 was to have the authority to originate new loans or purchase new assets (either directly or indirectly) expire on December 31, 2020,” Mnuchin wrote. “As such, I am requesting that the Federal Reserve return the unused funds to the Treasury.”

The move came as a surprise to the Fed, who said in an emailed statement that it “would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”

S&P 500 futures fell by 0.75% following Mnuchin’s request, and benchmark US Treasury yields also slipped.

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In addition to the request for the money’s return, Mnuchin did extend for 90 days three separate programmes which did not make use of CARES Act Funds, including measures acting as backstops for commercial paper and money markets.

Recent data has shown that an expected early recovery from the historic economic downturn caused by the COVID-19 pandemic has begun to fade. 10 million US citizens who have lost jobs since January remain out of work.

David Gwyther, Business Development Director at Butterfield Mortgages Limited, explores how trust can be built with HNWIs in the "new normal", and why tech alone may not cut it.

The financial services sector is undergoing an important – and what some might say “long overdue” – transformation. The sudden onset of COVID-19 has forced high street banks through to specialist mortgage providers and alternative lenders to adapt to a new set of circumstances few would have anticipated.

Social distancing measures have forced the majority of these organisations to work remotely and this has provided its own set of challenges. In one respect, they have had to ensure the appropriate systems and processes are in place so that their employees can carry out their same roles and functions outside of the office. This has meant putting new systems and processes in place, including the adoption of digital tools.

As part of adapting to the “new normal”, another ongoing challenge has been reactively responding to the needs of their existing clients and the wider market. Again, this has proved difficult for some. Recent research by Butterfield Mortgages Limited (BML) revealed that 19% of homeowners had “lost faith” in their bank due to “poor support” it provided during the coronavirus. On top of this, one in four (25%) feel as though their banks have not been proactive in providing financial advice.

With the UK tightening lockdown measures in a bid to contain a spike in coronavirus infections, it is clear that remote working and social distancing will remain the norm for the foreseeable future. Naturally, the financial services sector will need to question whether they methods they are currently relying upon to engage with their customers will be effective in the long term.

While COVID-19 has had a positive impact in so far as forcing large institutions to review traditional (and outdated) practices, there has been an assumption that technology naturally provides the answer. In some respects, I do agree with this proposition. However, when it comes to engaging with certain types of clients and networks, I believe that relying on digital adoption too much could in fact damage relationships.

Naturally, the financial services sector will need to question whether they methods they are currently relying upon to engage with their customers will be effective in the long term.

Understanding the principles of effective client engagement

Working in the UK’s prime property market, I regularly deal with the needs and interests of high net worth individuals (HNWIs) interested in high-end real estate. The profile of this client can range from a non-UK resident seeking a property in prime central London (PCL) as a buy-to-let investment to a domestic buyer seeking a primary residence.

As someone who has worked closely with HNWIs and the brokers who represent them, it is clear to me that there is a certain way of engaging with this type of client. Given the size of the financial portfolios, their unique income structures and wealth management needs, HNWIs will only work with financial service providers they trust. Establishing this trust and confidence is a long-term outcome that requires effective client engagement. In other words, financial providers need to demonstrate their expertise and ability to effectively cater to the needs of HNWIs, all the while developing a personal and transparent relationship.

In my mind, this is the ultimate objective of any organisation seeking to engage with the wealth and ultra-wealthy. Before the COVID-19 pandemic, professional and social networking events, conferences and physical meetings proved to be the most effective avenues of communication. As we all know, the coronavirus means the majority of these events have been put on hold. Some have been held online and while they have proved to be a useful solution, I only see this as a temporary measure.

A similar observation can be made when it comes to video conferencing. While no doubt an effective measure in overcoming the obstacles posed by social distancing, this is not likely to totally replace physical interactions with clients. Many in my sector agree that there is something vitally important when physically engaging with HNWIs. Building trust and in turn future client networks is not something that can be achieved by digital communication. That’s why we should not see technology as a tool to be used to build effective relationships.

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The future of client engagement in the financial services

Drawing from the aforementioned BML survey, there was another interesting finding worth mentioning. We found that 31% of homebuyers and homeowners were frustrated by the ways their banks depend on chatbots and automated services. What this shows is that while tech is important, the financial services sector should not overlook the value of physical interactions with their clients.

These are important observations that need to be fully appreciated by the sector so that it can manage the current and future needs of the market. After all, once the COVID-19 pandemic finally subsides, we should expect to see the return of professional networking events and physical meetings.

Yes, there will be a greater reliance on technology to carry out certain communication roles. However, those based place to meet the future demands of the market will be those who have integrated technology as part of a client engagement strategy focused on building trust, confidence and longstanding relationships. This is extremely vital when dealing with the needs of HNWIs.

The banking and finance sector has provided over £4.1 billion to SMEs so far through the Coronavirus Business Interruption Loan (CBIL) scheme, UK Finance revealed today, as part of a broad package of support to help businesses through these tough times.

Over £1.33 billion of loans have been approved in the week from 21 April to 28 April 2020. The number of loans provided through the scheme has increased by 8,638 over the same period to a total of 25,262, an increase of over 50%.

The banking and finance sector is providing a range of support to SMEs to ensure they can receive the help most appropriate to their needs, including capital repayment holidays, overdrafts, working capital extensions and asset-based finance.

Lenders have received 52,807 completed applications under the CBIL scheme so far. 25,262 of these applications have been approved to date, while more applications are still being processed and are expected to be approved over the coming days.

Following reforms to the CBIL scheme introduced this week by the Treasury and British Business Bank, supported by regulators, the largest lenders have announced they will not require forward-looking financial information and will only ask businesses for information and data they might reasonably be able to provide at speed. This should streamline the application process and help lenders provide financing to businesses who need it as quickly as possible.

The banking and finance sector is providing a range of support to SMEs to ensure they can receive the help most appropriate to their needs, including capital repayment holidays, overdrafts, working capital extensions and asset-based finance.

The British Business Bank approved four more lenders for accreditation under the CBIL scheme this week, bringing the total number of accredited lenders to 52. This means businesses can now access financial support under CBILS from a wide variety of firms.

The industry is also working closely with the Government and regulators to deliver the new Bounce Back Loans scheme which will make it quicker and easier for smaller businesses to apply for and access the finance they need.

Stephen Jones, Chief Executive of UK Finance, said:  “The banking and finance sector recognises the role we must play in getting the country through these tough times, and staff are working incredibly hard to get money to those viable businesses that need it.

“More than £4 billion has been delivered to over 25,000 businesses so far through the CBIL scheme, as part of a broad package of support for SMEs including capital repayment holidays, extended overdrafts and asset-based finance.

“The changes to the scheme announced by the Chancellor this week will enable lenders to streamline their application processes and help even more businesses access the support they need.

“This extensive support will be complemented by the new Bounce Back Loans scheme targeted at smaller businesses, which lenders are now working at pace to get up and running from Monday.”

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Case Studies

Chosen Care Group - Homecare services for the elderly

Chosen Care Group ltd, which provides domiciliary care to elderly and vulnerable people in their own homes across Essex, received a £1 million loan from Barclays through the CBIL scheme. The loan will help allow Chosen Care Group ltd continue to provide valuable in-home care during the COVID-19 crisis. The company of 240 employees was nominated for the Great British Care Awards in 2018.

London Drum Company — Drum and percussion supplier

London Drum Company, a supplier of drum and percussion instruments based in Deptford, saw a significant drop in income after gigs and concerts across the world were cancelled or postponed due to COVID-19. The company received a large loan from HSBC UK under the CBIL scheme, which has enabled it to replace its lost income streams and purchase new equipment for its workshop space, an area of the business that can continue to grow despite the current climate. This will help put the business in a strong position to support the UK music industry when the government restrictions are lifted.

Pallet Plus - Logistics company transporting medical goods

Pallet Plus is a logistics company in Colchester, Essex, with 48 employees and a fleet of 28 vehicles. The company has enabled the transport of vital goods throughout the pandemic including Personal Protective Equipment (PPE), medical consumables and ventilators for delivery to the NHS and care homes, as well as goods to supermarkets. Pallet Plus also helped to deliver a donation of Easter Eggs given by the confectionary company Mars to NHS hospitals throughout the UK. The company received a £250,000 overdraft facility from Santander UK under the CBILS scheme, to reduce the impact on their business of potential losses caused by an increase in staff sickness or a decline in trading.

Regency Corporation — Independent group of pubs

The Regency Corporation runs 20 pubs across Sussex, each of which are run independently and tailored to the local community they are based in. The company secured a £250,000 loan from Lloyds Bank through the CBIL scheme after having to shut its pubs and furlough its 150 employees due to the COVID-19 lockdown. The loan will boost cashflow, meaning the business can pay its suppliers and its staff until its furlough grant is received from the government.

SXS Events Productions — Corporate events company

SXS Events Productions Limited, a corporate events company based in Bristol, has had to furlough non-essential staff as events have been postponed until later in the year. The firm recevied a £170,000 loan from NatWest through the CBIL scheme. This loan will give the business as long as possible to plan ahead for when events are rescheduled.