British fintech startups face challenges without access to capital due to pandemic

In the course of a survey by the Digital Finance Forum, it turned out that almost half of the respondents consider limited access to capital to be their most serious problem.

British fintech executives believe the COVID-19 pandemic will make it difficult to raise funding next year. This is evidenced by the results of a survey conducted as part of the Digital Finance Forum (DFF).

More than a hundred fintech founders took part in the DFF survey conducted by the Digital Finance Forum. Most of the respondents (43%) own companies that work in the field of lending, while 34% indicated banking services and payment transactions as their main activity.

The vast majority of respondents (65%) work in small businesses (50 employees or fewer). Only a quarter of them has founded companies with a turnover of less than £ 10 million.

The survey revealed that four out of five respondents believe COVID-19 will make it harder to raise funding next year. At the same time, slightly less than half (46%) of those surveyed cite limited access to capital as their most serious problem.

Only a quarter of surveyed respondents believe that the state provided sufficient support to the financial technology sector during the pandemic. In recent months, half of the respondents received support at the state level. A so-called furlough scheme was the most popular in the UK. It allows employees on vacation to receive 80% of their wages – 61% of those surveyed took advantage of it.

The respondents would like to make it easier to get government support: 37% said they applied for government loans, but were refused. They also recommended the government to review the criteria for participation in programs that provide tax relief scheme to young companies – now many fintech companies cannot participate in it.
CEO and co-founder of the online service LendInvest Christian Faes considers that the government should support the sector as British fintech companies are helping to rebuild the economy. Besides, it’s important to do to remain world leaders.
Industry officials also noted that venture capital firms have “too much influence” over the government. At the same time, they did almost nothing to help fintech enterprises during the crisis.

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