Bounce back loan

[jimbof]

Whats stopping a business taking the money and closing the business? It seems there is no appetite to chase businesses as it's bad PR.

Looks like an invitation to fraud.

I don't really think so.
First, you've got to be minded that way (what % of business owners are minded to act in such a willfully criminal way?)
Secondly, you have to have an existing company that looks to have been actively traded recently with enough turnover for it to be worth bothering with, yet you don't mind driving a forklift through the company and "phoenixing" it with the reputational hit that brings when your customers see the change of business details.
Or you were already planning on exiting the business and think you might as well do this now.

Of course there will be some element up to the above. But I'm sure it will be small %.

More likely defaults will be folk whose businesses just fold eventually; perhaps they were already running marginal businesses who think the loan will fix what could only be fixed with structural changes and a slight downturn is enough to seal their fate. Or perhaps they're in businesses that may never be viable again (at least not in the forseeable). For those unable to adapt the loans just defer the inevitable.

 

[gpietersz]

@jimbof I was about to comment on much the same lines. People who are both going to benefit from doing it and are dishonest enough to actually do it are a small %.

I am sure far fewer than the number who will genuinely go under in the next year or two.

 

[commadus]

I am just reading from the FT where Banks expect 40%-50% of those to default to then tune of about £9bn.

https://www.ft.com/content/8a551c37-2de8-446b-a8b8-d4a61d33ef73

 

[commadus]

I don't really think so.
First, you've got to be minded that way (what % of business owners are minded to act in such a willfully criminal way?)
Secondly, you have to have an existing company that looks to have been actively traded recently with enough turnover for it to be worth bothering with, yet you don't mind driving a forklift through the company and "phoenixing" it with the reputational hit that brings when your customers see the change of business details.
Or you were already planning on exiting the business and think you might as well do this now.

Of course there will be some element up to the above. But I'm sure it will be small %.

More likely defaults will be folk whose businesses just fold eventually; perhaps they were already running marginal businesses who think the loan will fix what could only be fixed with structural changes and a slight downturn is enough to seal their fate. Or perhaps they're in businesses that may never be viable again (at least not in the forseeable). For those unable to adapt the loans just defer the inevitable.

I think perhaps the money would have been better spent on the recovery rather than slowing the descent - the V shaped recovery.

 

[jimbof]

I think perhaps the money would have been better spent on the recovery rather than slowing the descent - the V shaped recovery.

I think the money spent on defaulters under this scheme will end up being an insignificant sum in the scale of the amount of money that is eventually going to be pumped into recovering from this situation.

 

[mark_s]

Does anyone know how long these loans take to go through. I applied for mine through HSBC about 10 days and still haven't heard anything back?

 

[Pot131]

Has anyone been refused by Natwest? After waiting weeks they’ve since refused me without offering any reasons why

Anyone? I didn’t even know it was possible to be refused!

 

[Aniela]

Anyone? I didn’t even know it was possible to be refused!

Thousands of people are being refused.

Lenders can choose if to accept the application or not.

 

[Pot131]

Thousands of people are being refused.

Lenders can choose if to accept the application or not.

Without giving a reason why it’s been refused? Seems ludicrous

Even more so when there’s others on this thread who want to take it as a dividend and then shut their business down, and they’ve been approved!

 

[Aniela]

Without giving a reason why it’s been refused? Seems ludicrous

Even more so when there’s others on this thread who want to take it as a dividend and then shut their business down, and they’ve been approved!

That's what I've seen plastered all over Twitter, yes!

Some people get told it's because their business doesn't meet their risk profile but apart from that it's a 'Declined and that's all we're saying'.

 

[commadus]

When money is handed out so quick with few checks and banks not having any skin in the game, then fraud will be rampant.

 

[MrMFS]

Let's stay polite.

Government wish to distribute money to every business that existed before the cut off date.

I would say politely remind that scheme is self sertified and all requests such as go to your main bank, where is prove of turnover, etc are not relevant.



It's simply a matter of KYC and anto fraud checks which are done before account opening.

 

[jimbof]

Let's stay polite.

Government wish to distribute money to every business that existed before the cut off date.

I would say politely remind that scheme is self sertified and all requests such as go to your main bank, where is prove of turnover, etc are not relevant.

It's simply a matter of KYC and anto fraud checks which are done before account opening.

I think although the above is true, reality is under the scheme the banks have the ultimate authority. It's not in the bank's own interest to lend the funds to companies that are very likely to fail anyway as there is no net benefit (they >just< get their money back, no profit); they are better off lending to those customers that look like they'll provide ongoing business for the bank, or cutomers that already have some debt with the bank that this money will make it more likely for the bank to get paid back on that unsecured debt.

The banks haven't allocated bottomless pits to the scheme so it is logical that they're going to decide to allocate those funds in some way that best suits their interests, not yours.

 

[Aniela]

I think although the above is true, reality is under the scheme the banks have the ultimate authority. It's not in the bank's own interest to lend the funds to companies that are very likely to fail anyway as there is no net benefit (they >just< get their money back, no profit); they are better off lending to those customers that look like they'll provide ongoing business for the bank, or cutomers that already have some debt with the bank that this money will make it more likely for the bank to get paid back on that unsecured debt.

The banks haven't allocated bottomless pits to the scheme so it is logical that they're going to decide to allocate those funds in some way that best suits their interests, not yours.

That makes sense but is gatekeeping the governments help to the businesses, which shouldn't be allowed.

As that does mean the government is saying "Here's money for you" and then a bank can say "Well, we're not giving it to you" and from there, there's not much you can do. The government will say to try another lender. However, most lenders are only offering it to existing customers currently.

 

[jimbof]

That makes sense but is gatekeeping the governments help to the businesses, which shouldn't be allowed.

They're not though.

The Govt could have chosen to give the loans directly, but they haven't. Or they could have given the banks a sackload of cash to distribute, but again they haven't. The banks are funding this with their own money. From the information about becoming an acredited lender:
"4.3 Availability of Capital
Each applicant must have or will have sufficient capital available to meet their lending forecasts for the duration of the Scheme Period, covering smaller business lending both with and without BBLS support."

The criticism really that should be due lands on the shoulders of the Govt. If you ask a commercial entity to do something, they'll do it in the way which is of most benefit to them. Anything else is actually negligent on their part to their shareholders. These are not charitable enterprises.

 

[commadus]

Let's stay polite.

Government wish to distribute money to every business that existed before the cut off date.

I would say politely remind that scheme is self sertified and all requests such as go to your main bank, where is prove of turnover, etc are not relevant.



It's simply a matter of KYC and anto fraud checks which are done before account opening.

So you just need to exist and you can self certify for the loan.

The worst that can happen is a rejection.

 

[J-Kristina]

Anyone that got a feeder account with HSBC or Natwest with a low credit score?

Seeing lots of people being declined for feeder accounts because of that.

I just wish Monzo offered the scheme..

 

[Rawlinson Pryde]

HSBC finally gave out the BBL today to one of our clients!

Applied 5 May
Signed paperwork 9 May
Complained 27 May
Signed paperwork again 3 June as they lost the electronic copy
Got loan 3 June

 

[GFI]

I got declined for an HSBC feeder account yesterday. Applied on the 8th of May.

They said it was following credit checks.

Just have to wait for Tide (banked with them for 14 months) to get their act together and work through their waiting list.....

 

[J-Kristina]

I got declined for an HSBC feeder account yesterday. Applied on the 8th of May.

They said it was following credit checks.

Just have to wait for Tide (banked with them for 14 months) to get their act together and work through their waiting list.....

Did you have an already existing HSBC personal account? Is your credit low?

 

[GFI]

No I wasn't a HSBC customer so fully extedrnal application. I have some post divorce black marks on my personal credit file from 4 years ago and my ltd is only 14 months old so it doesn't have any credit history really.

 

[J-Kristina]

No I wasn't a HSBC customer so fully extedrnal application. I have some post divorce black marks on my personal credit file from 4 years ago and my ltd is only 14 months old so it doesn't have any credit history really.

Still makes no sense that you get declined. The BBL is given to anyone except exceptional cases like bankruptcy. So the banks decided to go one level further and just decline your for a feeder account because of bad credit? A feeder account that exists only for a few hours?

 

[Porky]

Starling Bank being trashed by LBC Radio callers tonight. Callers have complained to BritIsh Business Bank that Starling are carrying out credit checks which are not part of the bounce back application process. British Business Bank want swamped with complaints and are investigating Starling Bank.

Expert on LBC Iain Dale show says Starling should be getting the loans out which are 100% guaranteed by the Govt, and should contact British Business Bank to look at applications for Bounce Back Loans offered by Starling.

I just applied Starling for one of my smaller coys, just for a business account, no BBL requirement for that business, it’s been 10 days and they still haven’t set the account up! Clearly swamped on the BBL side.

Meanwhile, at Metro, Jesus how long does it take... they still haven’t opened up for applications yet.

 

[Aniela]

Still makes no sense that you get declined. The BBL is given to anyone except exceptional cases like bankruptcy. So the banks decided to go one level further and just decline your for a feeder account because of bad credit? A feeder account that exists only for a few hours?

The BBL is offered to everyone to apply for... but the lenders can choose who they wish to lend to and can choose to decline you.

 

[commadus]

I just applied Starling for one of my smaller coys, just for a business account, no BBL requirement for that business, it’s been 10 days and they still haven’t set the account up! Clearly swamped on the BBL side.

Meanwhile, at Metro, Jesus how long does it take... they still haven’t opened up for applications yet.

I am sure the Bank can make credit checks for AML and KYC otherwise you could sign up as Daffy Duck.

Also its per company so people can apply for multiple loans. Banks should not dispense their duty as custodians of this scheme just to meet a PR soundbite of the money being in your account within 24 hours.

 

[commadus]

For those that have signed and returned the forms and then do not receive the money. As there contracts were signed say 2 weeks ago then they would have to repay the money by that time in a years time.

So all this delay is actually eating into their time.

 

[anonuk]

Also its per company so people can apply for multiple loans.

Not strictly true. There was some discussion a while back in this thread about what is considered a group of companies and many that will have applied as separate companies will likely have fallen foul of the rules without realising it.

 

[mark_s]

I've applied for this through HSBC, they've asked me to send a copy of a tax return but the email address they provide to send it to doesn't work and all enails are returned. Has anyone else had this problem or know of a solution other than calling them?

 

[jxm28788]

I've applied for this through HSBC, they've asked me to send a copy of a tax return but the email address they provide to send it to doesn't work and all enails are returned. Has anyone else had this problem or know of a solution other than calling them?

Lucky... we've not been contacted at all after 4 weeks...

 

[Mr D]

The BBL is offered to everyone to apply for... but the lenders can choose who they wish to lend to and can choose to decline you.

They appear to lend to pretty much anyone. Except a very small percentage based on what people are reporting.
Across multiple forums and social media I can find hundreds turned down for CBIL. Can find less than a handful for BBL.

 

[jxm28788]

Across multiple forums and social media I can find hundreds turned down for CBIL. Can find less than a handful for BBL.

But how many are stuck "in progress"? Did you find anyone that had received funds via the HSBC feeder account?

 

[Mr D]

But how many are stuck "in progress"? Did you find anyone that had received funds via the HSBC feeder account?

Several stuck or banks not yet offering it. But few turned down.

 

[Aniela]

They appear to lend to pretty much anyone. Except a very small percentage based on what people are reporting.
Across multiple forums and social media I can find hundreds turned down for CBIL. Can find less than a handful for BBL.

In the last figures given by Starling they've declined 16% of applicants.

I'd say that's quite a high percentage...

 

[Mr D]

In the last figures given by Starling they've declined 16% of applicants.

I'd say that's quite a high percentage...

Wow, that is quite high. Though need to see the numbers - 16% is also 1 declined out of 6 applications!

Though low compared to CBIL which appeared to take the usual bank view that if you need money they don't want to lend it to you.

 

[Aniela]

Wow, that is quite high. Though need to see the numbers - 16% is also 1 declined out of 6 applications!

Though low compared to CBIL which appeared to take the usual bank view that if you need money they don't want to lend it to you.

Starlings CEO put tweets up with the numbers.

I know some people are getting declined for not using their accounts much. If they take third party payments via Paypal/Stripe etc and only deposit the money once every 6 months or so for example.

Banks have called one or two people I know and stated they were declined due to that; not enough account activity.

Not sure why that's a reason for a decline but appears to be one of the reasons.

 

[Mr D]

Starlings CEO put tweets up with the numbers.

I know some people are getting declined for not using their accounts much. If they take third party payments via Paypal/Stripe etc and only deposit the money once every 6 months or so for example.

Banks have called one or two people I know and stated they were declined due to that; not enough account activity.

Not sure why that's a reason for a decline but appears to be one of the reasons.

Great. Except I don't have twitter so haven't seen the tweets. Care to share them?
No worries if not, can look it up after.

Not enough bank activity - so bank don't know the estimate (and for many it will be an estimate) is close to correct?
Government bends over backwards getting money to businesses - and considerable risk of fraud - and banks still don't play along. Perhaps the banks are the problem?

Must admit I only bank spare money from paypal in the bank - I'm more likely to use the money in paypal for paying suppliers than using bank itself. So much quicker and easier using paypal.

 

[jimbof]

Great. Except I don't have twitter so haven't seen the tweets. Care to share them?
No worries if not, can look it up after.

Not enough bank activity - so bank don't know the estimate (and for many it will be an estimate) is close to correct?
Government bends over backwards getting money to businesses - and considerable risk of fraud - and banks still don't play along. Perhaps the banks are the problem?

Must admit I only bank spare money from paypal in the bank - I'm more likely to use the money in paypal for paying suppliers than using bank itself. So much quicker and easier using paypal.

Starling openly say that it is one of their terms for BBLS that you must be using your Starling account as your main business bank account. They clearly don't see their role as you appear to; from their point of view it seems to be a service they are offering to their bonafide business customers.

I guess with low account activity compared to what you are saying is your turnover (and asking for 25% of as a loan) you probably start to look like an instafail of their "using Starling as main bank account" criteria.

(note the "You" here isn't "you" specifically, Mr D, I meant the straw man Starling customer being turned away).

 

[Aniela]

Starling openly say that it is one of their terms for BBLS that you must be using your Starling account as your main business bank account. They clearly don't see their role as you appear to; from their point of view it seems to be a service they are offering to their bonafide business customers.

I guess with low account activity compared to what you are saying is your turnover (and asking for 25% of as a loan) you probably start to look like an instafail of their "using Starling as main bank account" criteria.

(note the "You" here isn't "you" specifically, Mr D, I meant the straw man Starling customer being turned away).

Should that be allowed though?

My issue with that, is that it allows the lender to become a gatekeeper for government assistance. Not based on the government stating to; but themselves setting up gate-keeping rules.

The government is saying here's your financial support and the lender simply says "we're not giving it to you" - And there isn't any recourse to that.

I understand requiring you to be banking with them; but to have a requirement that you must use their bank for some random amount of transactions/volumes that they decide, shouldn't be allowed.

I don't believe other lenders allow you to sign up for the BBL, unless you bank with them. (At present anyway.) That leaves you in a position where you may bank with starling, get declined by them and then you literally can go no where else to get a BBL.

You're pretty much stopped from getting the help you've been offered.

This may change once other lenders aren't under heavy load but if you're trying to get a BBL, I'm assuming waiting 1-2 months for banks to change their rules is going to be too late for most.

 

[anthony mellon]

How are people still able to open sole trader accounts with Lloyds bank when their website clearly states that they are not accepting new applications?

 

[jimbof]

Well, looks like a slightly rocky start for Metrobank - went online yesterday but had to take system back offline to fix an issue - but perhaps they've come good after all (they had long enough to!).

I rejoined the queue today and just did an application (Limited company, incorporated 2018). After waiting in their queue system for an hour (online queue) it took about 15 minutes to complete the application process, and the approval was emailed instantly. Funds should be here by COB tomorrow. We'll see.

It looks like they've set up a completely separate system to administer these loans, which I guess means they're not going to be visible in the regular online banking system, which is a bit of a shame.