Bounce back loan

[OMGVape]

Application details just released

100% backed my government but it also says the borrower remains 100% liable

https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

 

[anonuk]

Application details just released

100% backed my government but it also says the borrower remains 100% liable

https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

My first question has to be, why wouldn't the borrower remain 100% liable? I mean, it's a loan after all

In the nitty gritty, it does say that in pursuing borrowers that are unable to pay, the banks are not allowed to take possession of the borrowers principle house or car, so that's a bit of protection if you're not a ltd company.

 

[OMGVape]

I guess it means for a default, the government with come after you rather than the lender.

 

[Mark T Jones]

For clarity, if the borrower is a ltd company then the company is liable, not the directors

if it’s a sole trader or partnership then usual rules apply.

 

[The Soup Dragon]

Sounds like the interest rate will be variable and decided upon by the bank depending on the client?

 

[anonuk]

I guess it means for a default, the government with come after you rather than the lender.

I think it just means that if you default, the bank are within their rights to pursue you to the full extent of their abilities. Only after the lender has exhausted all options of recovery from the borrower, can they approach the British Business Bank to invoke the guarantee.

 

[anonuk]

Sounds like the interest rate will be variable and decided upon by the bank depending on the client?

The maximum is 2.5%. I've looked at two banks this morning (applied for a loan with our main bank) and both are sticking at the 2.5% which I assume will be the same for all other lenders (why would they offer a lower interest rate than they need to?) Still, 2.5% is a darn good rate if you ask me.

 

[Gordon - Commercial Finance]

Sounds like the interest rate will be variable and decided upon by the bank depending on the client?

Yes in theory, but capped at 2.5%, which is an insanely low rate for unsecured lending.

 

[anonuk]

Obviously, the governments plan for these loans is to boost the economy. They are hoping that companies/businesses will apply for a loan they shouldn't otherwise be eligible for and spend spend spend. As such, they need to get as much money out of the door as they possibly can and as quickly as they can.

However, the way they have phrased some of the questions leaves me wondering if they have left the loans wide open to abuse. For example, on the two application forms I've looked at, they are asking for your annual turnover for 2019. Fair enough, but they then say 'estimates are fine' and then goes on to say that HMRC will retrospectively check some applications but moreso in the event of default. So, what's to say someone won't abuse that to apply for much more than their real turnover should allow?

 

[Mark T Jones]

Obviously, the governments plan for these loans is to boost the economy. They are hoping that companies/businesses will apply for a loan they shouldn't otherwise be eligible for and spend spend spend. As such, they need to get as much money out of the door as they possibly can and as quickly as they can.

However, the way they have phrased some of the questions leaves me wondering if they have left the loans wide open to abuse. For example, on the two application forms I've looked at, they are asking for your annual turnover for 2019. Fair enough, but they then say 'estimates are fine' and then goes on to say that HMRC will retrospectively check some applications but moreso in the event of default. So, what's to say someone won't abuse that to apply for much more than their real turnover should allow?

There will be plenty of abuse. some deliberate other just over-optimism. It's the nature of the beast

Having spent my working career in business lending the only way to understand this facility is to forget everything you know.

Its a grant, which some will repay

 

[The Soup Dragon]

The maximum is 2.5%. I've looked at two banks this morning (applied for a loan with our main bank) and both are sticking at the 2.5% which I assume will be the same for all other lenders (why
would they offer a lower interest rate than they need to?) Still, 2.5% is a darn good rate if you ask me.

They must be quick off the mark, just trying to find it on HSBC who don't appear to have anything online yet only CBILS

 

[Gordon - Commercial Finance]

There's only a few that have managed to get it together in time. RBS haven't so far.

 

[anonuk]

They must be quick off the mark, just trying to find it on HSBC who don't appear to have anything online yet only CBILS

The two I've seen are Lloyds Bank and Santander (the two banks we have accounts with). Lloyds had their application form online by 7:30am and Santander's was about 8am.

 

[Gordon - Commercial Finance]

Revision: RBS now have applications open

 

[Gettingthereslowly]

Applied via Lloyds - very quick/slick system. Lots of tick boxes and Yes/No questions. (Took longer to read the questions than answer them). Total time was around 15mins. Application lodged - now just wait.

Agree with others 2.5% is an incredible rate for small businesses to get unsecured (we have secured commercial mortgage of 3.3% which we thought was good)

 

[Mark T Jones]

My personal view is that this is a truly spectucular achievement for both Government and the banks

But I know that some neg-heads will be along to throw scorn on it.

 

[BusterBloodvessel]

Frustratingly fell through the cracks on this one. We use an online bank for our business (Cashplus/APS Financial) so do not bank with any of the lenders offering the loans. However we can't open an account with them to then apply, as they are not accepting new applications due to the current situation! Catch 22.

 

[Gettingthereslowly]

Agree Mark, but this could have been done sooner/saved some people lots of sleep.

Up until this measure was introduced, we were unable to claim any of the other measures (apart from Furlough staff costs).

To answer one of your earlier posts: Lloyds said no early repayment penality, just have to repay a min amount of £2k.

Did notice that Lloyds reserved the right to transfer/sell the loan to a third party. Wonder if in a few months they dump the whole Bounce Back loan book to some PE co.

 

[John_V85]

Frustratingly fell through the cracks on this one. We use an online bank for our business (Cashplus/APS Financial) so do not bank with any of the lenders offering the loans. However we can't open an account with them to then apply, as they are not accepting new applications due to the current situation! Catch 22.

This is a temporary thing. Banks are dealing with their own customers first, but once the initial rush passes they'll be open to non-existing customers.

 

[Markwfc77susanpeevwer1]

Frustratingly fell through the cracks on this one. We use an online bank for our business (Cashplus/APS Financial) so do not bank with any of the lenders offering the loans. However we can't open an account with them to then apply, as they are not accepting new applications due to the current situation! Catch 22.

Yes I feel your Frustration, We use a personal account for our business and Lloyds request you hold a Business account same as all the other lenders, they state you must Bank with them, so I don't know why it says on the British bank Webpage to try other lenders as I think you don't have that option. I think there will be a lot of Sole Traders miss out here!!

 

[Clodbuster]

Pity the stipulation that dividends will not be permitted until the loan is repaid is not in force.

 

[BusterBloodvessel]

This is a temporary thing. Banks are dealing with their own customers first, but once the initial rush passes they'll be open to non-existing customers.

Thanks John. I suppose the concern is, how long will this take - and how long will the BBLS be available for?!

Yes I feel your Frustration, We use a personal account for our business and Lloyds request you hold a Business account same as all the other lenders, they state you must Bank with them, so I don't know why it says on the British bank Webpage to try other lenders as I think you don't have that option. I think there will be a lot of Sole Traders miss out here!!

That's a shame as some of the lenders I've looked at are allowing you to use your personal account if it's used for business purposes. Lloyds site says they are investigating it so fingers crossed for you.

 

[Colin_W]

Frustratingly fell through the cracks on this one. We use an online bank for our business (Cashplus/APS Financial) so do not bank with any of the lenders offering the loans. However we can't open an account with them to then apply, as they are not accepting new applications due to the current situation! Catch 22.

Just had a look on the HSBC site and they are offering the loans to customers to other banks; they ask that either applicants open an account, or otherwise they will create some kind of temporary holding account to pay the lona into to then be transferred elsewhere. They have said non-customer applications will take longer.

 

[BusterBloodvessel]

Update for anyone - HSBC are now accepting applications and it looks like they will accept them if you do not bank with them. You have to call to open a temporary feeder account, I just spoke to them and they are having issues with these but said to call back "within a couple of hours".

I suppose whether the application then gets accepted after that is another matter! Will keep people updated.

 

[BusterBloodvessel]

Crossed posts Colin

 

[BusterBloodvessel]

Sorry for multiple posts today - to my earlier question regarding length of time, spotted this on HSBC website

How long will The Bounce Back Loan Scheme run for?
The Bounce Bank Loan Scheme will initially be available for six months from 4 May 2020 to 4 November 2020.

Will the Bounce Back Loan Scheme funds run out so I can’t access the scheme?
The Government has confirmed that the amount of funding available under the scheme will be demand-led. Therefore, there’s no immediate need to apply if you don’t need finance in the short-term.

The HSBC site seems one of the most informative so far tbh in terms of questions & answers about things - may be worth a read for people.

https://www.business.hsbc.uk/en-gb/finance-and-borrowing/credit-and-lending/bounce-back-loan-scheme

 

[OMGVape]

Going through Lloyds application it looks like me personally is applying, rather than me on behalf of the company.

 

[swankypants69]

Have applied through Natwest, or rather have registered an interest as such and now awaiting email to then go further with the application......

 

[Stephen Parry]

Frustratingly fell through the cracks on this one. We use an online bank for our business (Cashplus/APS Financial) so do not bank with any of the lenders offering the loans. However we can't open an account with them to then apply, as they are not accepting new applications due to the current situation! Catch 22.

we are exactly the same, we use PayPal business so no high street business account so another system we miss out on and haven’t earns a penny in months...

 

[Stephen Parry]

Just had a look on the HSBC site and they are offering the loans to customers to other banks; they ask that either applicants open an account, or otherwise they will create some kind of temporary holding account to pay the lona into to then be transferred elsewhere. They have said non-customer applications will take longer.

Been on to HSBC this morning to create a temp holding business account and they have no idea.

 

[Newchodge]

Been on to HSBC this morning to create a temp holding business account and they have no idea.

No idea about what?

 

[Stephen Parry]

No idea about what?

On how to create a feeder account to enable non HSBC customers to apply for the loan.

 

[BusterBloodvessel]

Hi Stephen, I was amazed to call HSBC and find that (A) my call was answered instantly, and (B) the guy seemed to know right away what I needed to do regarding the feeder account. However as I mentioned above he did say they've had issues and it's not ready to go yet and to call within a couple of hours. I'll be trying again this afternoon & will feedback on here.

 

[LTDcompanier]

Sorry to be dense, but if I, as a LTD company director apply for this, do I have to pay tax on it if I take it out of the business?

Say I borrowed £10,000, will I pay corporate tax when it arrives in my account?

Could I use it to pay myself a salary or dividend?

Or could I, as a LTD Company directory, apply for it myself, not through my company? As if I'm a sole trader?

Thanks

 

[Rosco1112]

I was eagerly waiting to apply for this scheme this morning refreshing Natwest business home webpage and finally saw a link to apply for the Bounce Back Loan Scheme. I had to fill out an online form it looked like an eight year old had designed just asking for my name email and contact number. Didn't ask for my account number, how much I was looking to borrow, my company turnover etc. I then received an email saying they will be in touch.

I am absolutely disgusted with Natwest, my business had to shut down on March 17th and have tried countless number of times to get in touch with Natwest to see how they can support me, I have been unable to speak to the business team. I have managed to get through a couple of times and the operator took my details and said a member of the business team will be in touch within 3 working days, low and behold I don't hear back from them! I don't know if it is some type of twisted joke but I still receive a weekly email from them re-assuring me that they understand that I need to speak with them but due to the high demand they are taking longer than usual! 6 weeks? what a joke!

I initially only wanted to put a payment holiday on the business loan I have with them but they took payment to service the loan last week! You really couldn't write this, I cannot wait to leave this shoddy bank.

I wouldn't be surprised if I don't even hear back from my application for the Bounce Back Loan! I might try HSBC like others have spoken about here.

Good luck everyone, especially if your are with CrapWest

 

[swankypants69]

I was eagerly waiting to apply for this scheme this morning refreshing Natwest business home webpage and finally saw a link to apply for the Bounce Back Loan Scheme. I had to fill out an online form it looked like an eight year old had designed just asking for my name email and contact number. Didn't ask for my account number, how much I was looking to borrow, my company turnover etc. I then received an email saying they will be in touch.

I am absolutely disgusted with Natwest, my business had to shut down on March 17th and have tried countless number of times to get in touch with Natwest to see how they can support me, I have been unable to speak to the business team. I have managed to get through a couple of times and the operator took my details and said a member of the business team will be in touch within 3 working days, low and behold I don't hear back from them! I don't know if it is some type of twisted joke but I still receive a weekly email from them re-assuring me that they understand that I need to speak with them but due to the high demand they are taking longer than usual! 6 weeks? what a joke!

I initially only wanted to put a payment holiday on the business loan I have with them but they took payment to service the loan last week! You really couldn't write this, I cannot wait to leave this shoddy bank.

I wouldn't be surprised if I don't even hear back from my application for the Bounce Back Loan! I might try HSBC like others have spoken about here.

Good luck everyone, especially if your are with CrapWest

Must admit I was expecting sort of just a click away application, in a continuous process, adding proof of whatever as and when required, didn't expect to have to now wait for an email from them to continue with my application, bit disappointed so far, but will see what the rest of the day makes, reserving judgement so far ha ha

I do have a relationship manager who I can call upon if need be, which is handy!

 

[Mr D]

Sorry to be dense, but if I, as a LTD company director apply for this, do I have to pay tax on it if I take it out of the business?

Say I borrowed £10,000, will I pay corporate tax when it arrives in my account?

Could I use it to pay myself a salary or dividend?

Or could I, as a LTD Company directory, apply for it myself, not through my company? As if I'm a sole trader?

Thanks

Treat it like any other loan.
Its not income.

Are you also a sole trader in a separate business?

 

[Mr D]

I was eagerly waiting to apply for this scheme this morning refreshing Natwest business home webpage and finally saw a link to apply for the Bounce Back Loan Scheme. I had to fill out an online form it looked like an eight year old had designed just asking for my name email and contact number. Didn't ask for my account number, how much I was looking to borrow, my company turnover etc. I then received an email saying they will be in touch.

I am absolutely disgusted with Natwest, my business had to shut down on March 17th and have tried countless number of times to get in touch with Natwest to see how they can support me, I have been unable to speak to the business team. I have managed to get through a couple of times and the operator took my details and said a member of the business team will be in touch within 3 working days, low and behold I don't hear back from them! I don't know if it is some type of twisted joke but I still receive a weekly email from them re-assuring me that they understand that I need to speak with them but due to the high demand they are taking longer than usual! 6 weeks? what a joke!

I initially only wanted to put a payment holiday on the business loan I have with them but they took payment to service the loan last week! You really couldn't write this, I cannot wait to leave this shoddy bank.

I wouldn't be surprised if I don't even hear back from my application for the Bounce Back Loan! I might try HSBC like others have spoken about here.

Good luck everyone, especially if your are with CrapWest

May have been better to take the unofficial holiday with the loan. Cancelling payment.
Where cannot get payment holiday its the expensive method.

 

[anonuk]

Going through Lloyds application it looks like me personally is applying, rather than me on behalf of the company.

I thought that. I've not applied through Lloyds but when I clicked through the application, nowhere on the application did it ask for my company name or company registration number (whereas Santander did). The only thing I can think of is that they pull the required info from your account number and sort code.

 

[Scalloway]

Sorry to be dense, but if I, as a LTD company director apply for this, do I have to pay tax on it if I take it out of the business?

Say I borrowed £10,000, will I pay corporate tax when it arrives in my account?

Could I use it to pay myself a salary or dividend?

If you are speaking about the loan it is not taxable income for the company. You could use it to pay your salary but you would need to be clear that was acceptable to the bank.