Bounce back loan

Discussion in 'COVID-19 Forum' started by OMGVape, May 4, 2020.

  1. OMGVape

    OMGVape UKBF Regular Free Member

    474 62
    Posted: May 4, 2020 By: OMGVape Member since: Jan 21, 2018
    #1
  2. anonuk

    anonuk UKBF Regular Free Member

    302 44
    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.
     
    Posted: May 4, 2020 By: anonuk Member since: Feb 27, 2014
    #2
  3. OMGVape

    OMGVape UKBF Regular Free Member

    474 62
    I guess it means for a default, the government with come after you rather than the lender.
     
    Posted: May 4, 2020 By: OMGVape Member since: Jan 21, 2018
    #3
  4. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

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    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.
     
    Posted: May 4, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #4
  5. The Soup Dragon

    The Soup Dragon UKBF Regular Free Member

    168 5
    Sounds like the interest rate will be variable and decided upon by the bank depending on the client?
     
    Posted: May 4, 2020 By: The Soup Dragon Member since: May 13, 2013
    #5
  6. anonuk

    anonuk UKBF Regular Free Member

    302 44
    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.
     
    Posted: May 4, 2020 By: anonuk Member since: Feb 27, 2014
    #6
  7. anonuk

    anonuk UKBF Regular Free Member

    302 44
    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.
     
    Posted: May 4, 2020 By: anonuk Member since: Feb 27, 2014
    #7
  8. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

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    Yes in theory, but capped at 2.5%, which is an insanely low rate for unsecured lending.
     
    Posted: May 4, 2020 By: Gordon - Commercial Finance Member since: Jun 26, 2017
    #8
  9. anonuk

    anonuk UKBF Regular Free Member

    302 44
    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?
     
    Posted: May 4, 2020 By: anonuk Member since: Feb 27, 2014
    #9
  10. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

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    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
     
    Posted: May 4, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #10
  11. The Soup Dragon

    The Soup Dragon UKBF Regular Free Member

    168 5
    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
     
    Posted: May 4, 2020 By: The Soup Dragon Member since: May 13, 2013
    #11
  12. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

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    There's only a few that have managed to get it together in time. RBS haven't so far.
     
    Posted: May 4, 2020 By: Gordon - Commercial Finance Member since: Jun 26, 2017
    #12
  13. anonuk

    anonuk UKBF Regular Free Member

    302 44
    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.
     
    Posted: May 4, 2020 By: anonuk Member since: Feb 27, 2014
    #13
  14. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

    2,483 850
    Revision: RBS now have applications open
     
    Posted: May 4, 2020 By: Gordon - Commercial Finance Member since: Jun 26, 2017
    #14
  15. Gettingthereslowly

    Gettingthereslowly UKBF Contributor Free Member

    33 7
    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)
     
    Posted: May 4, 2020 By: Gettingthereslowly Member since: Nov 14, 2019
    #15
  16. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

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    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.
     
    Posted: May 4, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #16
  17. BusterBloodvessel

    BusterBloodvessel UKBF Regular Free Member

    260 103
    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.
     
    Posted: May 4, 2020 By: BusterBloodvessel Member since: Jan 22, 2018
    #17
  18. Gettingthereslowly

    Gettingthereslowly UKBF Contributor Free Member

    33 7
    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.
     
    Posted: May 4, 2020 By: Gettingthereslowly Member since: Nov 14, 2019
    #18
  19. John_V85

    John_V85 UKBF Contributor Free Member

    36 3
    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.
     
    Posted: May 4, 2020 By: John_V85 Member since: Jan 11, 2019
    #19
  20. Markwfc77susanpeevwer1

    Markwfc77susanpeevwer1 UKBF Newcomer Free Member

    1 0
    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!!
     
    Posted: May 4, 2020 By: Markwfc77susanpeevwer1 Member since: May 4, 2020
    #20