Bounce back loan

[minghis]

Lloyds exceeded my expectations - I filled out the questionnaire/form yesterday lunchtime and the money was in the account this morning.

Whole process took about 5 minutes. No extra questions, no messing, just done.

Makes a change for something to go well! Well done Government, well done Lloyds.

 

[Mark T Jones]

Ok so you've decided they're bad and now it doesn't matter what they do, they're wrong.

Open a Starling account as suggested above and see how you get on with them.

Haha. ‘Damned if they do, damned if they don’t’ springs to mind.

Some people are just happier being victims.

 

[Mancunian]

Haha. ‘Damned if they do, damned if they don’t’ springs to mind.

Some people are just happier being victims.

There are plenty of positive comments on this thread where banks have done a great job.

I echo the positives about Starling, much simpler process with them. Very pleased that I switched one of my businesses to them a while ago.

Where banks are not doing things very well, people have a right to express this view. Nothing about being a victim Mark.

 

[Gordon - Commercial Finance]

Not sure that's entirely true, 2.5% is a big spread on the base rate and if there is so much money being pumped out, they will make plenty.

You can be very sure that if they were making losses on this they would simply refuse to participate.

2.5% is not a big spread for unsecured lending, and also the expected default rate is nowhere near covered by a rate like that.

 

[Rasmus]

Hi

I am currently a company director, and my boss is the sole shareholder. He is about to sell the company, and this BBL would give him more time to sort out things. However, I am the director and bank account signatory, as he lives abroad.
I was wondering what would be my responsibilities if he sells the company in the future?
and if I get fired by the new boss, as I am the one that is supposed to submit the BBL request?

Thank you for your thoughts.

 

[YPC2017]

So as far as I can see they’re just smashing out these loans with zero checks so you can fabricate your turnover. Anyone applied twice and received the money?

The loans are zero risk to the banks so assume they’re just happy to get the money out of the door as fast as possible.

 

[Digimem]

Can you buy fixed assets with this loan? Like a storage unit

 

[minghis]

As far as I know you can do whatever you want with it as long as it benefits your business.

 

[anonuk]

Can you buy fixed assets with this loan? Like a storage unit

The terms provided by Santander specifically stated you are not allowed to purchase fixed assets. I’m sure the other lenders will be the same as it is a standard criteria from the treasury.

 

[Mancunian]

The terms provided by Santander specifically stated you are not allowed to purchase fixed assets. I’m sure the other lenders will be the same as it is a standard criteria from the treasury.

I think you can buy fixed assets that replace existing assets.

Personally, I would say spend it on whatever the business needs to get through this, or continue to grow. Don't take the piss. Then repay it, and everyone is happy.

 

[gpietersz]

2.5% is not a big spread for unsecured lending, and also the expected default rate is nowhere near covered by a rate like that.

There is a 100% government guarantee so the banks do not need to cover the defaults.

They do need a spread to handle and administer it, and I think to try and get people to pay before they ask for the guarantee so I am sure thy are doing OK with it.

Don't take the piss. Then repay it, and everyone is happy.

Seems sensible, but then why are one or two lenders requiring people not to buy assets with it?

 

[Ian J]

The loans are zero risk to the banks so assume they’re just happy to get the money out of the door as fast as possible.

Somehow I doubt it as if given a choice I would guess that the major banks would have rather not participate in the scheme.

Maybe the financial risk is low but the returns are nowhere near what the banks could earn elsewhere and the administration is going to be enormous, especially when the defaulters start to mount up which is probably going to be 12 months plus one day from when the loans were handed out

 

[gpietersz]

Somehow I doubt it as if given a choice I would guess that the major banks would have rather not participate in the scheme.

Did they not have a choice?

Smaller banks are evidently not being pressured to join but some have chosen to so they presumably do think its profitable.

 

[jimbof]

Maybe the potential for bank profit is only on the backside of these, when the recoveries have to start and the recovery costs are charged to the loan account and then picked up by the Govt...

Perhaps HSBC have clocked this and are trying to hoover up as much of the action as possible.

 

[Gordon - Commercial Finance]

Smaller banks are evidently not being pressured to join but some have chosen to so they presumably do think its profitable.

Bigger banks have been asked to participate. Asked or more likely told.

One smaller bank has chosen to join, and look at the great publicity they’re getting, and the new account sign ups. That will be very profitable in the long run I hope so they’ve been very shrewd and forward thinking there. There’s certainly not enough profit in the interest to make it worth their while.

 

[Red Wood]

2.5% is not a big spread for unsecured lending, and also the expected default rate is nowhere near covered by a rate like that.

But it isn't unsecured, it's unwritten by the gov. Risk free.

 

[Mancunian]

Bigger banks have been asked to participate. Asked or more likely told.

One smaller bank has chosen to join, and look at the great publicity they’re getting, and the new account sign ups. That will be very profitable in the long run I hope so they’ve been very shrewd and forward thinking there. There’s certainly not enough profit in the interest to make it worth their while.

Starling have closed applications for new sole trader accounts so they can better service existing accounts.

Doesn’t really back up your view on their motivation to take part in this scheme, does it?

There are one or two regular posters who seem intent on defending the indefensible, and taking a rather cynical view of banks like Starling who are putting some of the old guard to shame.

 

[Gordon - Commercial Finance]

But it isn't unsecured, it's unwritten by the gov. Risk free.

Guaranteed by the gov doesn’t make it secured. The government guarantee isn’t an asset.

And there’s still plenty risk in it due to the caveats through the government’s guarantee. They won’t just cough up at the first sniff of trouble.

 

[Mancunian]

Guaranteed by the gov doesn’t make it secured. The government guarantee isn’t an asset.

No, makes it more secure.

What would you prefer to lend on, a loan secured on an asset or one guaranteed by the government?

 

[Gordon - Commercial Finance]

No, makes it more secure.

What would you prefer to lend on, a loan secured on an asset or one guaranteed by the government?

Seeing as it’s far easier to get money back for a repossessed asset than it is to get money out of the government, I’ll take the secured one.

 

[Red Wood]

I

Guaranteed by the gov doesn’t make it secured. The government guarantee isn’t an asset.

My understanding is asset backed is asset backed, i.e a charge on 'something', secured would include guarantored/guaranteed by 'someone'

 

[Mancunian]

Seeing as it’s far easier to get money back for a repossessed asset than it is to get money out of the government, I’ll take the secured one.

You have experience in recovering assets from defaulters, do you?

Your logic is seriously flawed.

 

[Gordon - Commercial Finance]

I


My understanding is asset backed is asset backed, i.e a charge on 'something', secured would include guarantored/guaranteed by 'someone'

I get what you’re saying, but no not quite the same.

The point I was making in the first place before I started to get attacked (!) a bit was the difference in pricing between secured and unsecured lending. In the commercial debt world (which I know a bit about) security refers to asset charge. Guarantees such as one given by a company director is a guarantee. Not security.

 

[Gordon - Commercial Finance]

You have experience in recovering assets from defaulters, do you?

Your logic is seriously flawed.

You do realise I’m a commercial debt broker right? The clue is in the name.

 

[Mancunian]

You do realise I’m a commercial debt broker right? The clue is in the name.

Yes, I know exactly what you do.

 

[Red Wood]

I get what you’re saying, but no not quite the same.

The point I was making in the first place before I started to get attacked (!) a bit was the difference in pricing between secured and unsecured lending. In the commercial debt world (which I know a bit about) security refers to asset charge. Guarantees such as one given by a company director is a guarantee. Not security.

Not attacking you at all. Just splitting hairs. Out of interest, how enforceable are director guarantee's. I'm assuming many directors are usually leveraged in their businesses anyway (SMEs) so if their biz goes, so does any hope of getting £££ from the director(s) usually right?

As a debt broker, do they give you a flat kick back that's already priced into the funds?

 

[Gordon - Commercial Finance]

Not attacking you at all. Just splitting hairs. Out of interest, how enforceable are director guarantee's. I'm assuming many directors are usually leveraged in their businesses anyway (SMEs) so if their biz goes, so does any hope of getting £££ from the director(s) usually right?

As a debt broker, do they give you a flat kick back that's already priced into the funds?

Yes sorry I didn’t mean you attacking me.

DG’s are very enforceable - the contracts are iron clad. Whether or not much money comes back from them I’m not so sure because like you say if their livelihood goes, there’s no personal money to pay it. I’ve not been in the game long enough to have seen much of that cycle running, so I wouldn’t like to guess.

And debt brokers do get commission based on funds advanced yes. It’s not flat, usually percentage based. The phrase “Kick back” maybe has certain connotations so it’s not a term I would use, but effectively yes that’s how all brokers make a living.

 

[Red Wood]

When lending backed by an asset such as property or what ever that might be, rule of thumb what would be the max loan percentage against the value of that asset?

 

[Gordon - Commercial Finance]

When lending backed by an asset such as property or what ever that might be, rule of thumb what would be the max loan percentage against the value of that asset?

Wheeled assets, traditional stuff like HGVs, diggers and stuff, up to 100% is common.

Property isn’t my main thing so I don’t know quite as much about that, but on bridging and development under normal circumstances it’s usually 75% LTV. At the moment I think it’s restricted to 65%.

 

[Rasmus]

Hi

I am currently a company director, and my boss is the sole shareholder. He is about to sell the company, and this BBL would give him more time to sort out things. However, I am the director and bank account signatory, as he lives abroad.
I was wondering what would be my responsibilities if he sells the company in the future?
and if I get fired by the new boss, as I am the one that is supposed to submit the BBL request?

Thank you for your thoughts.

Any help?

 

[billybob99]

The clue is in the name.

And he's a Mancunian, clue is in the name, i.e. not all there.

 

[Mancunian]

Still no further forward with HSBC, 11 days after application. Awful customer service. No way of even knowing if they have received the application at all.

Kudos to Starling Bank who have turned round an application in less that 2 days from initial application to payout. I believe they have had a few glitches, but they have shown what is possible with the right approach.

 

[Desolate]

For those who have been getting the Barclays Error - I got a text last night saying they were sorry not to have called me and that they would do so soon. Logged into internet banking this morning and thought I'd check and hey presto! the application process worked. Very simple and straightforward and apparently money in account within once business day. We shall see.

 

[Desolate]

Any help?

Providing you told the truth when you applied, if you are dismissed then you won't have any comeback at all.
If they go bust within 12 months of you leaving you may be asked to justify your actions whilst you were there.

 

[gpietersz]

Bigger banks have been asked to participate. Asked or more likely told.

One smaller bank has chosen to join, and look at the great publicity they’re getting

Except its not just the biggest banks plus Starling:

https://www.british-business-bank.c...oans/current-accredited-lenders-and-partners/

 

[Gordon - Commercial Finance]

Except its not just the biggest banks plus Starling:

https://www.british-business-bank.c...oans/current-accredited-lenders-and-partners/

Tell me which one of those is not a big bank?

 

[gpietersz]

Tell me which one of those is not a big bank?

Skipton Business Finance (not even a bank!) and Starling.

Some of the others depending on where you draw the line.

Also I said "the biggest" which definitely excludes some others.

 

[alan1302]

Skipton Business Finance (not even a bank!) and Starling.

Some of the others depending on where you draw the line.

Also I said "the biggest" which definitely excludes some others.

They are part of the Skipton Building Socety which has over a million members - you don't class that as large?

 

[Newchodge]

They are part of the Skipton Building Socety which has over a million members - you don't class that as large?

Biggest is an absolute. 'One of the biggest' is a grammatical nonsense. One of the bigger would work, but then would need a definition.

I think Starling are good.

 

[gpietersz]

They are part of the Skipton Building Socety which has over a million members - you don't class that as large?

For a bank, yes.

In the context of disputing that Starling is the only "small bank" to offer bounce bank loads, definitely yes, because Starling has more customers than Skipton.