Bounce-back loan technicality

Discussion in 'COVID-19 Forum' started by PerplexedVexed, May 23, 2020 at 8:49 AM.

  1. PerplexedVexed

    PerplexedVexed UKBF Newcomer Free Member

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    I applied for a BBL and was refused due to a system error. I subsequently applied elsewhere. Bank 1 have reviewed their original decision and come back with a yes, Bank 2 was a straight accept.

    Where do I stand legally if I take both loans?

    I have gone through the paperwork and does not seem to be anything in the actual loan agreement that forbids this. The only thing was the "are you in the process of applying elsewhere" question in the application that I correctly answered "no".

    I've also gone through the Gov site and seemingly nothing about multiple loans from different banks.

    Please do not judge or chastise me and keep comments or replies to the technicality of the question.

    I'm not saying I'm going to do it, but interesting to see if there is a loophole there
     
    Posted: May 23, 2020 at 8:49 AM By: PerplexedVexed Member since: May 23, 2020
    #1
  2. Aniela

    Aniela UKBF Contributor Free Member

    78 12
    The paperwork from the banks are for their terms only. Taking the BBL from a lender is under the assumption you're sticking to the British Business Bank terms which state

    "The business (and any wider group of which it is part) is not already in the process of applying for or has not already received a Bounce Back Loan Scheme facility."

    The bigger questions would be WHY you need two BBL's. The business would likely be in a very, very bad place to need two of them right now. If that's the case, a BBL is maybe not the best option.

    If you're asking if you could "get away with it" regardless; most likely. I doubt they're checking. I mean, think of the amount of people who get personal loans or use personal credit cards to start a business; which isn't technically allowed. It's only when you can't pay it back, it comes a problem.

    As I said, at the core, the bigger question is why you would need two loans. That would say there is a bigger issue at hand with the business.
     
    Posted: May 23, 2020 at 9:01 AM By: Aniela Member since: Mar 28, 2020
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  3. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    5,954 1,900
    The gov site states:-

    The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

    The maximum loan available not the maximum loan available from each lender.

    I think that you probably already knew the answer which is why you asked not to be judged and I won't judge you as we get quite a few chancers on this forum all trying to scam the system
     
    Posted: May 23, 2020 at 9:10 AM By: Ian J Member since: Nov 6, 2004
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  4. PerplexedVexed

    PerplexedVexed UKBF Newcomer Free Member

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    Thank you for your replies.

    I'm well aware that it would probably go unnoticed for some time, the point I am trying to get to is to ascertain whether this would be a criminal act.

    As mentioned, no interest in getting into a morality debate.
     
    Posted: May 23, 2020 at 9:42 AM By: PerplexedVexed Member since: May 23, 2020
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  5. Aniela

    Aniela UKBF Contributor Free Member

    78 12
    Yes, it would be a criminal act. It's fraud regardless if you get caught or not.

    I appreciate the 'no interest in getting into a morality debate' - It's just that you ask a question that would only be ever asked if someone was looking to do something morally wrong. I feel you know the answer already, just wanting to know the repercussions.
     
    Posted: May 23, 2020 at 10:00 AM By: Aniela Member since: Mar 28, 2020
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  6. PerplexedVexed

    PerplexedVexed UKBF Newcomer Free Member

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    Thank you for your reply but I was looking for a more informed response based on the legality.

    Also, leave the passive aggressive comments to one side. You know nothing of my situation and vice versa.
     
    Posted: May 23, 2020 at 10:03 AM By: PerplexedVexed Member since: May 23, 2020
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  7. Mr D

    Mr D UKBF Legend Free Member

    21,996 2,586
    Something morally wrong and criminal act aren't the same thing.

    Like many issues, it comes down to first whether getting noticed that he has 2 loans, secondly whether they simply ask for one (or both) of them back.
     
    Posted: May 23, 2020 at 10:04 AM By: Mr D Member since: Feb 12, 2017
    #7
  8. Newchodge

    Newchodge UKBF Big Shot Free Member

    14,155 3,731
    You have not, yet, done anything wrong, however when you sign to accept the loan there ought to be a clause to reflect the rule that "The business (and any wider group of which it is part) is not already in the process of applying for or has not already received a Bounce Back Loan Scheme facility." If there is such a clause you will be committing fraud when you sign for the second loan as you will have already received aBBL facility.

    If there is no such clause in either agreement, I cannot see it is fraud.
     
    Posted: May 23, 2020 at 10:05 AM By: Newchodge Member since: Nov 8, 2012
    #8
  9. ecommerce84

    ecommerce84 UKBF Regular Free Member

    761 247
    Does the combined total of the loans take you over 25% of your 2019 turnover?
     
    Posted: May 23, 2020 at 10:07 AM By: ecommerce84 Member since: Feb 24, 2007
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  10. PerplexedVexed

    PerplexedVexed UKBF Newcomer Free Member

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    Thank you for your reply

    I can confirm that neither back has such a clause in their loan agreement. Just a clause absolving them of any liability wrt my eligibility for the scheme
     
    Posted: May 23, 2020 at 10:09 AM By: PerplexedVexed Member since: May 23, 2020
    #10
  11. Aniela

    Aniela UKBF Contributor Free Member

    78 12
    Didn't say they are. I agree with that.

    It doesn't come down to being noticed that he has 2 loans though. In this situation you are not allow 2 loans. Period.
     
    Posted: May 23, 2020 at 10:10 AM By: Aniela Member since: Mar 28, 2020
    #11
  12. Aniela

    Aniela UKBF Contributor Free Member

    78 12
    You apply for the loans under the terms of the BBL. The terms state you can not have more than one loan.

    There's nothing more to say on it. You're clearly at this stage looking for technicalities on how to get away with doing it.
     
    Posted: May 23, 2020 at 10:13 AM By: Aniela Member since: Mar 28, 2020
    #12
  13. Mr D

    Mr D UKBF Legend Free Member

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    Unless he gets caught its all a moot point.
     
    Posted: May 23, 2020 at 10:18 AM By: Mr D Member since: Feb 12, 2017
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  14. Aniela

    Aniela UKBF Contributor Free Member

    78 12
    How is it a moot point? It's fraud if he gets caught or not.
     
    Posted: May 23, 2020 at 10:21 AM By: Aniela Member since: Mar 28, 2020
    #14
  15. Mr D

    Mr D UKBF Legend Free Member

    21,996 2,586
    Because until or if he gets caught its simply down to him.
    No one else involved.

    Your morals, someone else's ethics, don't matter as we aren't doing it.
     
    Posted: May 23, 2020 at 10:24 AM By: Mr D Member since: Feb 12, 2017
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  16. Aniela

    Aniela UKBF Contributor Free Member

    78 12
    It's illegal. End of.
     
    Posted: May 23, 2020 at 10:31 AM By: Aniela Member since: Mar 28, 2020
    #16
  17. PerplexedVexed

    PerplexedVexed UKBF Newcomer Free Member

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    What I am asking is where does it say it is illegal?
     
    Posted: May 23, 2020 at 10:32 AM By: PerplexedVexed Member since: May 23, 2020
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  18. Aniela

    Aniela UKBF Contributor Free Member

    78 12
    That's a really odd argument. Illegal is illegal. Should not be promoted or discussed further.
     
    Posted: May 23, 2020 at 10:33 AM By: Aniela Member since: Mar 28, 2020
    #18
  19. Porky

    Porky UKBF Regular Full Member

    162 63
    Hi PV

    I will probably make myself popular with some of the self righteous here but this is how I see it.

    I don’t know your business circumstances, for all I know your business might need £200k let alone £100k in this crisis and the banks are not likely to support under CBILS. It’s a game of survival as I see it.

    So I would probably take both loans. As long as you can budget to repay them both I don’t see the problem. You have an obvious element of risk if one comes back later and insists you repay it early because we lent in error but I really don’t see that, but by then we might be over this crisis and business better positioned to sort it then anyway. At the moment as I say it’s survival.

    Posts about it being a fraud are ridiculous, your repayment loan is against each lender. Fraud is a very strong word, it’s a set of “guidelines” at the British bank. You are meeting the criteria of the specific lender at the time of the application, I don’t see anywhere in that wording that says if the bank mess up your application and then later Award the loan you can't have it as you now have another approved loan elsewhere oh and if you do it’s fraud and we will fine you, lock you up or feed you to the wolves. Give me a break.

    As you say, your question is one of legality not morality, I’m no lawyer but it’s a contract of offer and acceptance. The loan is being offered up to you if you want it or not.

    Good luck to you, it’s tough out there
     
    Posted: May 23, 2020 at 10:34 AM By: Porky Member since: Dec 27, 2019
    #19
  20. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    5,954 1,900
    They haven't awarded him a loan. They have offered it which is a completely different thing.

    I won't comment on your statement that "It’s a game of survival" as that's a defence that could be used by every thief
     
    Posted: May 23, 2020 at 10:46 AM By: Ian J Member since: Nov 6, 2004
    #20