Small traders struggle for survival as BBLS loans take too long to rebound | The Crusader | Finance

Bounce Back Loan Program: An Expert Explains How They Work

While 860,000 have received loans, which are 100% government backed, thousands of people also remain in dire straits, fearing bankruptcy as their applications are not accepted in the first place, trample in long lines. waiting or are rejected.

++ If you have been affected by this issue or believe you have been the victim of an injustice, please contact Consumer and Small Business Champion Maisha Frost at [email protected] ++;

Complaints about the different program conditions, process, and calls for help have poured into Crusader.

We understand that there are increasing calls for conditions to be changed, so that fewer businesses fall through the cracks and that a new grant-based program be put in place to catch up with those who are still excluded.

While the issues vary, there is a big gap between what companies say they have come to expect from what has been touted as a quick and easy rescue and the reality they are experiencing.

Even though the loans have attractive terms like a first year interest free, then a 2.5% fixed interest and the ability to borrow up to £ 50,000 or 25% of turnover, eligibility varies .

The main complaints from companies relate to waiting times of several weeks after filing an application, delays in getting the money even after approval, non-hearing and then rejection without any explanation, and even in a few cases offer an overdraft with associated costs instead.

In some cases, callous lender jargon such as “you don’t match our risk appetite” has rubbed the salt on the wounds and, in the face of the silence, some business owners have questioned whether the real reason is that the money was already exhausted.

Account status and credit checks are unexpected stumbling blocks.

The Bounce Back loan program is supported by the government (Image: Getty)

    Elizabeth welch

A loan is crucial for craftsman Elizabeth Welch (Image: Ric Turner)

The loan would change everything. I could keep my studio and equipment, continue to produce and grow my business – whatever happened before the pandemic

Elizabeth welch

Many small traders, perfectly legally, manage their business through their personal accounts, which is possible under BBLS rules.

But then they discover that they do not have enough information on tax returns or that they have to create a new professional account to access the funds of the plan, which turns out to be almost impossible, especially due to the colossal request.

Businesses then resort to going from lender to lender in debilitating and ultimate research to survive.

Anti-fraud, anti-money laundering (AML) and Know Your Customer (KYC) checks are mandatory and carried out.

But Past, often minor, personal credit problems that were resolved years ago are also shattering hopes.

The credit reference agency Experian warns: “Since bounce loans are government guaranteed, applying for a loan will generally not trigger a credit check and, therefore, will not leave a footprint on your credit report. However, most banks only offer bounce loans to existing customers, so new customers must first apply for a business bank account and undergo a credit check.

“This means that clients looking for rebound loans should be careful because multiple credit checks, and therefore strong footprints, are not good news for credit scores. “

Artisan Elizabeth welch in West Sussex, whose dazzling glass sculptures of wildlife are becoming collector’s items, is among the many cases we raise with lenders.

His sales at galleries and trade shows were wiped out.

But an HSBC customer for 16 years and with a business account and no credit problems, she was waiting to hear about a £ 10,000 BBL.

This relatively modest support would make all the difference, she said.

“The loan would change everything. I could keep my studio and my equipment, continue to produce and grow my business – whatever happened before the pandemic, ”she says.

HSBC UK confirmed: “We are investigating these complaints urgently. We have approved over 128,000 BBLs to date. As one of the few banks to accept requests from businesses that are not currently our customers, we have been inundated with requests to open accounts. As a result, wait times for new accounts are significantly longer than they were before COVID-19. “

After a wait after loan approval, real estate company Arrive Homes, a NatWest client for 11 years, is now expected to secure the funds within days.

“It will mean survival,” said director Philip Tierney when he thanked us for our support.

UK Finance, the body representing the financial and banking sector, said: “Lenders are providing an unprecedented level of support to businesses affected by the COVID-19 crisis.

“So far, more than 860,000 businesses have received a total of £ 26.3 billion in loans through the Bounce Back loan program – an average of over 140,000 approvals each week, with the vast majority of applicants being able to quickly access the financing they need. Recent research has shown that nearly nine in ten SMEs have had their Bounce Bank Loan (BBL) application approved when a final decision has been made, which is above the industry average of eight in ten for all applications. loan for SMEs.

About Eric Buss

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