Bounce back loan

[jimbof]

As I recall Barclays famously didn't have government help. From UK government anyway....

Seriously, the banks that did have help paid for it, quite a sum as I recall though been some years since saw it in banks accounts or annual Budget.

And like any of us hit with extra costs, simplest way of paying for it is get customers to pay extra.
That's you and me.

Yeah, that was my point. I think only RBS and Lloyds took taxpayer funds in the UK.
Yet HSBC are the one most notably seeking to offer the loans outside their existing customers.

 

[MrMFS]

Term Funding Scheme with additional incentives for SMEs (TFSME)


"Participants in the Bank of England’s Term Funding Scheme for SMEs may extend the term of certain funding under that scheme to align with the 6-year term of loans under the BBLS."

 

[Mr D]

Yeah, that was my point. I think only RBS and Lloyds took taxpayer funds in the UK.
Yet HSBC are the one most notably seeking to offer the loans outside their existing customers.

And HSBC has the work of setting up account. And may not get the custom even after all that - just the loan payment.
Still they should get some new customers out of it.

 

[jimbof]

You'd have to imagine that is their only play there.
Either that, or there must be pictures of some HSBC staffers making deposits into a pig's head somewhere..

 

[Porky]

Have to give Metro Bank 10/10 for its online Bounce Back loan facility.

They came under a lot of stick on social media but I think The initial problems were simply down to the huge volumes they were dealing with.

Personally I found the process VERY straight forward indeed, all online including signing the credit agreement, straight forward repayment schedule that doesn’t start until July 21 and money in the account the next day.

What more can you say, a good job done well

 

[Mr D]

Have to give Metro Bank 10/10 for its online Bounce Back loan facility.

They came under a lot of stick on social media but I think The initial problems were simply down to the huge volumes they were dealing with.

Personally I found the process VERY straight forward indeed, all online including signing the credit agreement, straight forward repayment schedule that doesn’t start until July 21 and money in the account the next day.

What more can you say, a good job done well

July 21st? Or July 2021?

 

[Porky]

July 21st? Or July 2021?

July 2021

 

[jimbof]

Have to give Metro Bank 10/10 for its online Bounce Back loan facility.

They came under a lot of stick on social media but I think The initial problems were simply down to the huge volumes they were dealing with.

Personally I found the process VERY straight forward indeed, all online including signing the credit agreement, straight forward repayment schedule that doesn’t start until July 21 and money in the account the next day.

What more can you say, a good job done well

Your experience mirrored mine. They seem to have done well (eventually).
They're unlikely to get overwhelmed with new accounts either as you have to visit a branch to open one... And BBLS with them is only for account holders.

I'm still leaving them for Starling over the fiasco that is importing their transaction data into Freeagent, though.

 

[Porky]

Your experience mirrored mine. They seem to have done well (eventually).
They're unlikely to get overwhelmed with new accounts either as you have to visit a branch to open one... And BBLS with them is only for account holders.

I'm still leaving them for Starling over the fiasco that is importing their transaction data into Freeagent, though.

Yes, that feed issue still remains, I have to manually upload to Quick Books and I’m on the brink of moving but everything else is really good to be fare.

I moved to metro from Lloyds and it was like a breath of fresh air to begin with, so I know that banking can be a heck of a lot worse, I really don’t want to move but as you say the feed issue is wasting my time and energy.

Meanwhile though BBLs superb

 

[Nick Walsh Studios]

Bounce Back Loan horror stories on Jeremy Vine Radio 2 today 26th June.

90 days no money, 100% of income gone and other stories.

Seems credit checks being made and many being refused Covid-19 financial help, no Universal Credit, no loans..

Lady called Rachel Flower called Radio 2 and has started action group for those refused BBL , maybe legal action against Govt for those fallen through the cracks and given no help.

Construction and Security staff forced to work during Covid-19 have the highest death rates followed closely by van drivers, taxi drivers and bus drivers.

 

[Nico Albrecht]

Construction and Security staff forced to work during Covid-19 have the highest death rates followed closely by van drivers, taxi drivers and bus drivers.

Any credible source to back that statement?

 

[Mr D]

Bounce Back Loan horror stories on Jeremy Vine Radio 2 today 26th June.

90 days no money, 100% of income gone and other stories.

Seems credit checks being made and many being refused Covid-19 financial help, no Universal Credit, no loans..

Lady called Rachel Flower called Radio 2 and has started action group for those refused BBL , maybe legal action against Govt for those fallen through the cracks and given no help.

Construction and Security staff forced to work during Covid-19 have the highest death rates followed closely by van drivers, taxi drivers and bus drivers.

Action against government? Or against banks?

 

[gpietersz]

Any credible source to back that statement?

https://www.ons.gov.uk/peoplepopula...s/deathsregistereduptoandincluding20april2020

It has been quite widely reported.

 

[Aniela]

Bounce Back Loan horror stories on Jeremy Vine Radio 2 today 26th June.

90 days no money, 100% of income gone and other stories.

Seems credit checks being made and many being refused Covid-19 financial help, no Universal Credit, no loans..

Lady called Rachel Flower called Radio 2 and has started action group for those refused BBL , maybe legal action against Govt for those fallen through the cracks and given no help.

Construction and Security staff forced to work during Covid-19 have the highest death rates followed closely by van drivers, taxi drivers and bus drivers.

Be interested to actually dig into the details of people being declined.

I bet in the large majority of cases, they are being declined for valid reason and just crying wolf because they know the lender can't call out their bullshit but they believe that publicly shaming the lender increases their chances of being accepted.

Sole-trader dog walking businesses saying they expect 100k turnover this year. Businesses that are in so much debt already that shows they're likely never going to be able to afford to repay another loan etc.

 

[Red Wood]

Be interested to actually dig into the details of people being declined.

I bet in the large majority of cases, they are being declined for valid reason and just crying wolf because they know the lender can't call out their ******** but they believe that publicly shaming the lender increases their chances of being accepted.

I spoke to my biz manager @ Barclays and he explained they are having circa 1500 fraudulent claims every 4 weeks and when rejected they are logging call back requests multiple times creating huge queues effecting businesses that really do need to access the funds.

He also said many 1000's of claims forfull amount are being made with biz accounts that their biggest balance had been under £2K. These types of situations are causing the backlog as they have a duty to process every application.

 

[Oxfolpwhov]

Why some Ltd company are abusing the loan.
I see some people put 200k when the company turnover is 70k. How come the government allow this.
Can the ltd use the money for other things like buying a car.

Will they ask you for Proof how you spend the money on what did you use it for.

 

[Mr D]

Why some Ltd company are abusing the loan.
I see some people put 200k when the company turnover is 70k. How come the government allow this.
Can the ltd use the money for other things like buying a car.

Will they ask you for Proof how you spend the money on what did you use it for.

Government does not complete the form for you.
If you put down 200k when actually turnover 70k it's not government typing.
Not up to them to decide what you put down.

However if the bank then decline it.....

 

[trax7960]

HSBC just declined my wife’s application due to credit scoring. Applied for 40k, average turnover ~280k, all we can see on the business credit file is an overdue balance/missed payment for the mobile phone contract.

They’re offering what is effectively a crisis loan, but declining people in crisis.

 

[Red Wood]

HSBC just declined my wife’s application due to credit scoring. Applied for 40k, average turnover ~280k, all we can see on the business credit file is an overdue balance/missed payment for the mobile phone contract.

They’re offering what is effectively a crisis loan, but declining people in crisis.

I was under the impression affordability or credit history/payment performance wasn't to be considered?

 

[Mr D]

I was under the impression affordability or credit history/payment performance wasn't to be considered?

But do they know that?

Or have internal policies changed in light of experience?

 

[gpietersz]

Are lenders not allowed to consider credit history, affordability etc. or is it just that not doing the usual checks does not affect the guarantee from the government?

They may have decided that its worth turning some people down because they do not want to have a high risk having having to try to collect the debt? What do they have to do before they can get the government to pay?

 

[trax7960]

I was under the impression affordability or credit history/payment performance wasn't to be considered?

For the loan itself, lenders are not allowed to use credit scoring. HSBC have worked around this by requiring a ‘loan feeder account’ to funnel the funds through, and that’s how they’re justifying all their usual checks.

The feeder account only stays open for a day, and is solely used to draw down BBL funds, so it’s a pretty poor justification really.

 

[Red Wood]

But do they know that?

Or have internal policies changed in light of experience?

Quite possibly

 

[gpietersz]

The feeder account only stays open for a day, and is solely used to draw down BBL funds, so it’s a pretty poor justification really.

I think its reasonable. If you borrow from a bank you have an account at then they probably have a rough idea of your real turnover, and would have run checks when you opened the account. If you are opening a feeder account to borrow, they know nothing about you.

 

[Red Wood]

For the loan itself, lenders are not allowed to use credit scoring. HSBC have worked around this by requiring a ‘loan feeder account’ to funnel the funds through, and that’s how they’re justifying all their usual checks.

The feeder account only stays open for a day, and is solely used to draw down BBL funds, so it’s a pretty poor justification really.

Clever, so they need to run their 'checks' for the feeder but not to process the loan

 

[Mr D]

For the loan itself, lenders are not allowed to use credit scoring. HSBC have worked around this by requiring a ‘loan feeder account’ to funnel the funds through, and that’s how they’re justifying all their usual checks.

The feeder account only stays open for a day, and is solely used to draw down BBL funds, so it’s a pretty poor justification really.

One way of avoiding some risks!
Of course its no good for the business needing money. Besides the bank of course.

 

[Aniela]

I was under the impression affordability or credit history/payment performance wasn't to be considered?

It's not considered for the BBL itself.

However, it depends on how it's handled. If you sign up for a new account with a lender, standard application processes are still put in place; KYC, fraud checks, affordability/risk criteria for the account itself etc.

If someone has been using a personal account account for the business and because of the BBL, needs a business account, the same applies as it's a new account opening.

It appears that the 'affordability' side of things is still vetted against potential fraud regardless. IE: If someone is stating 250k turnover but the amount of transactions going through the account isn't adding up, people are getting declined.

 

[Aniela]

HSBC just declined my wife’s application due to credit scoring. Applied for 40k, average turnover ~280k, all we can see on the business credit file is an overdue balance/missed payment for the mobile phone contract.

They’re offering what is effectively a crisis loan, but declining people in crisis.

You're leaving part of your story out here.

They can't decline a BBL due to credit score, so they wouldn't have told you that.

Do you mean you get declined for an account (or feeder account) with them? Are they your main business bank provider which you have all 280k a year of turnover sent through?

 

[anonuk]

You're leaving part of your story out here.

They can't decline a BBL due to credit score, so they wouldn't have told you that.

Do you mean you get declined for an account (or feeder account) with them? Are they your main business bank provider which you have all 280k a year of turnover sent through?

They shouldn’t be looking at the transactions going through your account either, for at least two reasons:
1) you might be an online company that accepts payments via PayPal. You might then choose to pay all of your suppliers via PayPal (the ones that accept it anyway!). So, you could receive £200k into PayPal each year but only ever transfer say £100k to your bank. Doesn’t mean your turnover is only £100k though.

2) the application allows for an estimated 2019 turnover so if you’ve only been trading for a few months, you’re not going to have funds going through your account to backup a particular turnover.

 

[ecommerce84]

It's not considered for the BBL itself.

However, it depends on how it's handled. If you sign up for a new account with a lender, standard application processes are still put in place; KYC, fraud checks, affordability/risk criteria for the account itself etc.

If someone has been using a personal account account for the business and because of the BBL, needs a business account, the same applies as it's a new account opening.

It appears that the 'affordability' side of things is still vetted against potential fraud regardless. IE: If someone is stating 250k turnover but the amount of transactions going through the account isn't adding up, people are getting declined.

Bang on point really.

The banks surely have some obligation to carry out checks on someone who opens a brand new account and requests tens of thousands of pounds as a loan with no trading history with the bank.

It either opens the door to massive fraud or some new PPI style ‘mis selling’ scandal in 6 years time:
“Did you take out a BBL loan you knew you couldn’t afford? With no real plan as to how you would pay it back? Did you inflate your turnover to do so? Well your in luck because the banks took your word on it, and didn’t check properly so we’ll get it written off for you. With compensation obviously. And at the tax payers expense. Just call Sue, Em and Scarper today - no win, no fee.”

 

[Aniela]

They shouldn’t be looking at the transactions going through your account either, for at least two reasons:
1) you might be an online company that accepts payments via PayPal. You might then choose to pay all of your suppliers via PayPal (the ones that accept it anyway!). So, you could receive £200k into PayPal each year but only ever transfer say £100k to your bank. Doesn’t mean your turnover is only £100k though.

2) the application allows for an estimated 2019 turnover so if you’ve only been trading for a few months, you’re not going to have funds going through your account to backup a particular turnover.

1) If you try and get a BBL where turnover/transaction amounts aren't matching up, lenders are requesting proof of business. For example, requesting X amount of months transaction history from Paypal.

2) Yes but basic logic applies here. If someone who has never had a business account before says they're a dog walker and expect 500k revenue in their first year, it's a clear sign of potential fraud.

The lenders still have a duty to spot and halt potential fraud where possible.

 

[Mr D]

The lenders still have a duty to spot and halt potential fraud where possible.

Particularly as its their money being lent out.

Sure they can get payment from the government in a year or two. In the meantime its their money being spent.

 

[anonuk]

It either opens the door to massive fraud or some new PPI style ‘mis selling’ scandal in 6 years time:
“Did you take out a BBL loan you knew you couldn’t afford? With no real plan as to how you would pay it back? Did you inflate your turnover to do so? Well your in luck because the banks took your word on it, and didn’t check properly so we’ll get it written off for you. With compensation obviously. And at the tax payers expense. Just call Sue, Em and Scarper today - no win, no fee.”

Potential fraud? Yes. Compensation claims? No chance. That’s why the loans have been exempt from consumer credit regulations.

1) If you try and get a BBL where turnover/transaction amounts aren't matching up, lenders are requesting proof of business. For example, requesting X amount of months transaction history from Paypal.

2) Yes but basic logic applies here. If someone who has never had a business account before says they're a dog walker and expect 500k revenue in their first year, it's a clear sign of potential fraud.

The lenders still have a duty to spot and halt potential fraud where possible.

Have you any evidence to suggest that banks are asking for proof of turnover? I’ve not seen anything if the sort. We have one company that makes 90% of its sales on Amazon. Amazon handles fulfilment and so take about 40% of the sales before transferring any money to our bank. This company has a turnover of £180k but only about £110k goes through our bank account. Our bank didn’t ask for any evidence, even though we could easily provide it via records from Amazon.

The only time I’ve seen any bank ask for evidence is for example when Starling Bank started offering BBL’s and asked some traders to submit self assessment tax returns.

With regards to number 2, I agree that logic SHOULD apply, but that’s not what’s happened at all. There have been people in this very thread that have admitted they have submitted applications stating they have a £200k turnover when in reality they have a £120k turnover yet they still had their application approved.

I do wonder whether the process has become tighter/stricter than it first was as our application was made within the first couple of days of BBLS being available.

 

[Aniela]

Potential fraud? Yes. Compensation claims? No chance. That’s why the loans have been exempt from consumer credit regulations.

Have you any evidence to suggest that banks are asking for proof of turnover? I’ve not seen anything if the sort. We have one company that makes 90% of its sales on Amazon. Amazon handles fulfilment and so take about 40% of the sales before transferring any money to our bank. This company has a turnover of £180k but only about £110k goes through our bank account. Our bank didn’t ask for any evidence, even though we could easily provide it via records from Amazon.

The only time I’ve seen any bank ask for evidence is for example when Starling Bank started offering BBL’s and asked some traders to submit self assessment tax returns.

With regards to number 2, I agree that logic SHOULD apply, but that’s not what’s happened at all. There have been people in this very thread that have admitted they have submitted applications stating they have a £200k turnover when in reality they have a £120k turnover yet they still had their application approved.

I do wonder whether the process has become tighter/stricter than it first was as our application was made within the first couple of days of BBLS being available.

Go on social media and contact people that have been declined, you'll find some who have been requested to prove turnover/transactions.

The example you stated is not really relevant. That is a situation where a business is clearly operating and doing quite well, if it has 110k going through the bank.

Lenders requiring proof is when it doesn't appear the business is actually operating on the scale that they're suggesting. IE: "We expect turnover to be 500k" but only has £500 in business transactions in 4 months.

"There have been people in this very thread that have admitted they have submitted applications stating they have a £200k turnover when in reality they have a £120k turnover yet they still had their application approved" --- That makes sense in terms of risk.

The risk rating of someone potentially lying about revenue when they have 120k a year going through their account, is vastly different to someone with £50 in their bank and £300 in transactions stating they expect to turnover 300k in their first year of business.

It's important to note that lenders can technically choose to decline/accept someone at their choosing regardless. You can meet all the requirements to be eligible and the lender can just say no. A lot of people don't realise that.

Just because someone is eligible doesn't mean the lender has to say yes.

 

[Nick Walsh Studios]

Any credible source to back that statement?

Probably Radio 2 researcher sourced the stats

 

[Dillon Lawrence]

Has anyone who applied for a feeder account from HSBC had anything back after going on to complete their new online application form?

Recieved an email saying that you now apply online for a feeder account. Filled it out a week ago and its stuck in 'pre-approval in progress', whatever that means...

 

[Ian J]

<snip>

Just because someone is eligible doesn't mean the lender has to say yes.

I have been wondering whether or not to apply for about £15,000 to fund a PPC campaign in a month or two but I'm wondering whether I would be declined as whilst the bank can see that my income through my bank account has gone down I never have less than about £70,000 on deposit with them which I deem to be my safety net

 

[Aniela]

Has anyone who applied for a feeder account from HSBC had anything back after going on to complete their new online application form?

Recieved an email saying that you now apply online for a feeder account. Filled it out a week ago and its stuck in 'pre-approval in progress', whatever that means...

HSBC can be sometimes quite slow on opening feeder accounts from what I've seen. Depends on your luck.

I have been wondering whether or not to apply for about £15,000 to fund a PPC campaign in a month or two but I'm wondering whether I would be declined as whilst the bank can see that my income through my bank account has gone down I never have less than about £70,000 on deposit with them which I deem to be my safety net

If applying with your main bank, you would more than likely get it quite easy.

 

[Red Wood]

I have been wondering whether or not to apply for about £15,000 to fund a PPC campaign in a month or two but I'm wondering whether I would be declined as whilst the bank can see that my income through my bank account has gone down I never have less than about £70,000 on deposit with them which I deem to be my safety net

£70K sat there not working for you seems a waste. Index tracker, liquid enough.

 

[commadus]

HSBC are not declining on turnover as that is not a criteria.

You can have £10 in your business bank account but if you run it properly you can still apply and get the full £50k.

The issue is on repayment when they will turn the screw.