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PostPosted: Mon May 04, 2020 7:45 am 
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StuartW wrote:
Some stuff on the FT's website this morning.

Some points worth noting. It says it's aimed partly at sole-traders, so that means you don't have to be registered as a limited company.

But looks like it will help if you have a business bank account, and can therefore apply to your normal bank. Of course, sole traders don't need a business bank account, so that shouldn't be a bar to being granted a loan, but it might take a bit longer, or may include a more difficult application process.

Note too the stuff about fraud and recovery on loan defaults, so although it may all look a bit more lax than the normal processes, at the end of the day it's not just free money that won't have to be paid back.

Anyway, less than three hours to go now, so it should all become a bit clearer later this morning. Or not, if the whole system collapses 8-[


How will the UK’s ‘bounce back loan’ scheme work?

https://www.ft.com/content/1ca15db2-93e ... 0309cd9716

Small businesses hope the fast-track credit scheme will be a lifeline

Who can apply for bounce back loans and what are the terms?

Companies of any size can apply, but they are aimed at small businesses with fewer than 10 employees and at the UK’s 900,000 sole traders.

You must have been trading on March 1 2020 and must not have been an “undertaking in difficulty” as of December 31 2019. Any individual other than a sole trader or a partner acting on behalf of a partnership cannot apply.

Mike Cherry, chair of the Federation of Small Businesses, said the coronavirus business interruption loan scheme (CBILS) “has not worked for the small firms that make up 99 per cent of our business community. The new bounce back facility offers real hope in this space”.

Under the scheme, companies can borrow between £2,000 and £50,000 for up to six years. Businesses can borrow a maximum of 25 per cent of their turnover.

The government will cover interest and fees on a loan for the first year. Businesses start their loan repayments after 12 months, and the interest rate will be 2.5 per cent.

How is a bounce back loan obtained?

The same 50-plus lenders accredited by the British Business Bank, the state-owned financial institution, to provide coronavirus business interruption loans are also expected to offer bounce back loans.

Companies seeking a coronavirus business interruption loan have complained about lengthy delays with the application process and stringent qualification criteria.

By contrast, applicants under the bounce back loan scheme will have to fill out a simple online form which will ask for details such as annual turnover, bank account number, the amount of credit sought, and whether the business has been adversely affected by the virus. You do not have to offer security or personal guarantees.

Nor do applicants have to stick with their existing lenders. Although the big five banks are responsible for the majority of lending, there are likely to be plenty of alternatives. These include peer-to-peer platforms such as Funding Circle, and SME lending specialists like Newable.

Stephen Jones, chief executive of UK Finance, the trade body for banks, said: “Lenders are working at pace to get the [bounce back loan] scheme up and running and we hope to see an increasing number of firms accredited from across the broad and diverse lending community to ensure [the scheme] is available to as many small business customers who wish to borrow under the scheme as possible.”

While the crisis means the need to get cash to businesses is pressing, HM Revenue & Customs will run retrospective checks on applications for bounce back loans as part of efforts to minimise fraud. These will be far more likely if applicants default on loan repayments and trigger the government guarantee.

How quickly will banks be able to make a decision on a loan application and provide the money?

Companies who apply to a lender with whom they already have a business account should expect to receive the loan within days.

For companies applying through new accounts, or which are approaching a new lender, it will take slightly longer, but banks said they will work to process these loans as quickly as possible.

A business applied for a coronavirus business interruption loan and heard nothing back: can it now apply for a bounce back loan?

Yes. You can apply for up to £50,000. You can also convert an existing or future coronavirus business interruption loan of £50,000 or less to a bounce back loan.

The interest rate of 2.5 per cent on bounce back loans is expected to be lower than on coronavirus business interruption loans, which only carry an 80 per cent state guarantee for the lender.

“The minimum facility size for term loans . . . under [the coronavirus business interruption loan scheme] will increase to £50,001 to avoid any risk of confusion or overlap [with the bounce back loan scheme],” Mr Sunak told lenders on Saturday.

What will happen if a business cannot afford to repay the bounce back loan?

Banks will chase borrowers who default in the normal way, seeking to seize property or other assets.

If they cannot recover the money, they will approach the British Business Bank and activate the government guarantee.

The British Chambers of Commerce said 30 per cent of its members could not afford to pay loans back.

Suren Thiru, head of economics at the British Chambers of Commerce, said: “Serious consideration must . . . be given to the expansion of grant schemes for firms unwilling to take on more debt repayments.”


We are a small family run partnership with two partners and not Sole traders...will there be a provision for that do you think?


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PostPosted: Mon May 04, 2020 8:04 am 
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Done..


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PostPosted: Mon May 04, 2020 8:07 am 
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You mean you've applied already?

Here's what I was doing in the meantime :roll:

Some stuff on the British Business Bank website about basic eligibility. It specifically states that partnerships are included.

Note the bit I've highlighted about the loans being 'not for personal purposes'. A difficult dividing line for the vast majority of sole traders, I suspect, so who knows how that will all work out.

Am I eligible?

The Scheme is open to most businesses, regardless of turnover, who meet the eligibility criteria and who were established on or before 1 March 2020[1]. Borrowers are required to declare, amongst other things, that:

    The business is engaged in trading or commercial activity in the UK at the date of the application, was carrying on business on 1 March 2020 and has been adversely affected by coronavirus (COVID-19).

    The business (and any wider group of which it is part) has not already received a Bounce Back Loan Scheme facility.

    The business (and any wider group of which it is part) has not yet obtained a loan through either the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, or the Covid Corporate Financing Facility, unless that loan will be refinanced in full by the Bounce Back Loan Scheme facility.

    That the business is a UK limited company or partnership, or tax resident in the UK

    The business is not a bank, building society, insurance company, public sector organisation, state-funded primary or secondary school, or an individual other than a sole trader or a partner acting on behalf of a partnership.

    Whether or not the business was, on 31 December 2019, a “business in difficulty” and does not breach State aid restrictions under the Temporary Framework; and if it was a “business in difficulty” then it must confirm it does not breach de minimis State aid restrictions and will not be used to support export-related activities.

    At the time of submitting their loan application, the business is neither in bankruptcy, debt restructuring proceedings, liquidation or similar.

    More than 50% of the income of the business (together with that of any member of any group of which it is a part) is derived from its trading activity. This confirmation is not required if the borrower is a charity or a further education college.

    They will use the loan only to provide economic benefit to the business, and not for personal purposes. They have understood the costs associated with repayment of the loan and that they are able and intend to complete timely repayments in future.

The application form also requires confirmations to be given in relation to losses that may be incurred, impact on credit rating, financial risk to personal assets (other than primary residence and primary personal vehicle), reduced consumer protection provisions, data protection consents and that lenders will not assess affordability.

Borrowers are advised that they should seek independent legal advice if they are in any doubt about the consequences of the loan agreement not being regulated by the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974 or any other aspect of taking out a loan.

For some businesses, who self-declare as being a “business in difficulty” on 31 December 2019, there may be restrictions on the amount of finance they are allowed to borrow and what they can do with the loan.


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PostPosted: Mon May 04, 2020 8:15 am 
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There's a ton of information on this page here, and plenty of links to other stuff. Just click on the 'For SMEs' section.

There doesn't seem to be many accredited lenders at this point, but that will presumably increase.

https://www.british-business-bank.co.uk ... ack-loans/


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PostPosted: Mon May 04, 2020 8:20 am 
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StuartW wrote:
You mean you've applied already?

Here's what I was doing in the meantime :roll:

Some stuff on the British Business Bank website about basic eligibility. It specifically states that partnerships are included.

Note the bit I've highlighted about the loans being 'not for personal purposes'. A difficult dividing line for the vast majority of sole traders, I suspect, so who knows how that will all work out.

Am I eligible?

The Scheme is open to most businesses, regardless of turnover, who meet the eligibility criteria and who were established on or before 1 March 2020[1]. Borrowers are required to declare, amongst other things, that:

    The business is engaged in trading or commercial activity in the UK at the date of the application, was carrying on business on 1 March 2020 and has been adversely affected by coronavirus (COVID-19).

    The business (and any wider group of which it is part) has not already received a Bounce Back Loan Scheme facility.

    The business (and any wider group of which it is part) has not yet obtained a loan through either the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, or the Covid Corporate Financing Facility, unless that loan will be refinanced in full by the Bounce Back Loan Scheme facility.

    That the business is a UK limited company or partnership, or tax resident in the UK

    The business is not a bank, building society, insurance company, public sector organisation, state-funded primary or secondary school, or an individual other than a sole trader or a partner acting on behalf of a partnership.

    Whether or not the business was, on 31 December 2019, a “business in difficulty” and does not breach State aid restrictions under the Temporary Framework; and if it was a “business in difficulty” then it must confirm it does not breach de minimis State aid restrictions and will not be used to support export-related activities.

    At the time of submitting their loan application, the business is neither in bankruptcy, debt restructuring proceedings, liquidation or similar.

    More than 50% of the income of the business (together with that of any member of any group of which it is a part) is derived from its trading activity. This confirmation is not required if the borrower is a charity or a further education college.

    They will use the loan only to provide economic benefit to the business, and not for personal purposes. They have understood the costs associated with repayment of the loan and that they are able and intend to complete timely repayments in future.

The application form also requires confirmations to be given in relation to losses that may be incurred, impact on credit rating, financial risk to personal assets (other than primary residence and primary personal vehicle), reduced consumer protection provisions, data protection consents and that lenders will not assess affordability.

Borrowers are advised that they should seek independent legal advice if they are in any doubt about the consequences of the loan agreement not being regulated by the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974 or any other aspect of taking out a loan.

For some businesses, who self-declare as being a “business in difficulty” on 31 December 2019, there may be restrictions on the amount of finance they are allowed to borrow and what they can do with the loan.


Yes..it was open to apply for before 9am, I had to go the Bank of Scotland site to apply even though they werent shown on the UK list of lenders but they had a BBLS application on their site.

Had an email back from them saying they were offering me a loan within 10 mins of applying...subject to checks.

So easy it was scary.


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PostPosted: Mon May 04, 2020 8:22 am 
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StuartW wrote:
There's a ton of information on this page here, and plenty of links to other stuff. Just click on the 'For SMEs' section.

There doesn't seem to be many accredited lenders at this point, but that will presumably increase.

https://www.british-business-bank.co.uk ... ack-loans/


That list is not comprehensive, be easier just to look on your preferred banks own website for BBLS.


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PostPosted: Mon May 04, 2020 8:30 am 
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bloodnock wrote:

Yes..it was open to apply for before 9am, I had to go the Bank of Scotland site to apply even though they werent shown on the UK list of lenders but they had a BBLS application on their site.

Had an email back from them saying they were offering me a loan within 10 mins of applying...subject to checks.

So easy it was scary.

So you've got a business account with Bank of Scotland?

The ones I've looked at require having a business account with them - although you can apply for one :roll:


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PostPosted: Mon May 04, 2020 8:32 am 
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StuartW wrote:
bloodnock wrote:

Yes..it was open to apply for before 9am, I had to go the Bank of Scotland site to apply even though they werent shown on the UK list of lenders but they had a BBLS application on their site.

Had an email back from them saying they were offering me a loan within 10 mins of applying...subject to checks.

So easy it was scary.

So you've got a business account with Bank of Scotland?

The ones I've looked at require having a business account with them - although you can apply for one :roll:


yes, had one with them since i started 20 years ago.


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PostPosted: Mon May 04, 2020 8:50 am 
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bloodnock wrote:

We are a small family run partnership with two partners and not Sole traders...will there be a provision for that do you think?

It is quite clear when you go to the application pages that partnerships can apply.

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PostPosted: Mon May 04, 2020 9:28 am 
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Please note that ideally you need a business account with the bank you're applying to, or you can apply for one, but as far as I know that would require attendance at a branch with ID etc and all the usual rigmarole for setting up an account, so obviously not particularly straightforward, particularly during lockdown.

However, some banks seem to be providing some sort of alternative option if you just use a personal account for business purposes, eg:

Santander wrote:
If you’re applying for a Bounce Back Loan but only have a personal current account which you use for your business, you’ll need to provide us a copy of your 2018/19 self-assessment tax return.


HSBC wrote:
If you are applying for a Bounce Back Loan and you have a personal current account used for your business with HSBC, and your business was established on or before 5 April 2019, you will be asked to supply your account number and sort code. We will require you to provide and attach a scanned copy of your 2018/19 self-assessment tax return with this application form. We may also ask for additional information to verify you as a business customer.

Think I mentioned a few weeks back that my accountant just sends me one copy of my tax return to be signed, so I don't even have a copy at home ](*,)

And the bank I've used for about thirty years doesn't do business accounts, so presumably won't be offering bounce back loans ](*,)


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PostPosted: Mon May 04, 2020 9:37 am 
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StuartW wrote:
Please note that ideally you need a business account with the bank you're applying to, or you can apply for one, but as far as I know that would require attendance at a branch with ID etc and all the usual rigmarole for setting up an account, so obviously not particularly straightforward, particularly during lockdown.

However, some banks seem to be providing some sort of alternative option if you just use a personal account for business purposes, eg:

Santander wrote:
If you’re applying for a Bounce Back Loan but only have a personal current account which you use for your business, you’ll need to provide us a copy of your 2018/19 self-assessment tax return.


HSBC wrote:
If you are applying for a Bounce Back Loan and you have a personal current account used for your business with HSBC, and your business was established on or before 5 April 2019, you will be asked to supply your account number and sort code. We will require you to provide and attach a scanned copy of your 2018/19 self-assessment tax return with this application form. We may also ask for additional information to verify you as a business customer.

Think I mentioned a few weeks back that my accountant just sends me one copy of my tax return to be signed, so I don't even have a copy at home ](*,)

And the bank I've used for about thirty years doesn't do business accounts, so presumably won't be offering bounce back loans ](*,)
You can apply to any of the banks on the list. it doesn't have to be your own bank.

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PostPosted: Mon May 04, 2020 9:51 am 
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grandad wrote:
bloodnock wrote:

We are a small family run partnership with two partners and not Sole traders...will there be a provision for that do you think?

It is quite clear when you go to the application pages that partnerships can apply.


It was the Yes/No answers some of which were a tad confusing that I had to think hard on, hit one wrong one and you might muck it up....and I don't do Bank speak. :sad:


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PostPosted: Mon May 04, 2020 2:36 pm 
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Think I mentioned a few weeks back that my accountant just sends me one copy of my tax return to be signed, so I don't even have a copy at home ](*,)

I'm guessing you didn't get your Government Gateway password then?

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PostPosted: Mon May 04, 2020 3:19 pm 
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grandad wrote:
StuartW wrote:
Please note that ideally you need a business account with the bank you're applying to, or you can apply for one, but as far as I know that would require attendance at a branch with ID etc and all the usual rigmarole for setting up an account, so obviously not particularly straightforward, particularly during lockdown.

However, some banks seem to be providing some sort of alternative option if you just use a personal account for business purposes, eg:

Santander wrote:
If you’re applying for a Bounce Back Loan but only have a personal current account which you use for your business, you’ll need to provide us a copy of your 2018/19 self-assessment tax return.


HSBC wrote:
If you are applying for a Bounce Back Loan and you have a personal current account used for your business with HSBC, and your business was established on or before 5 April 2019, you will be asked to supply your account number and sort code. We will require you to provide and attach a scanned copy of your 2018/19 self-assessment tax return with this application form. We may also ask for additional information to verify you as a business customer.

Think I mentioned a few weeks back that my accountant just sends me one copy of my tax return to be signed, so I don't even have a copy at home ](*,)

And the bank I've used for about thirty years doesn't do business accounts, so presumably won't be offering bounce back loans ](*,)
You can apply to any of the banks on the list. it doesn't have to be your own bank.

Yes, that was the point of what I wrote, and that you've just quoted in full :wink:

My point, essentially, was that it's *easier* if you have a business account with a participating bank. If you don't have an account, your application will require more 'due diligence' (to verify your ID and that you're actually in business, most obviously), and might require opening a business account and thus attendance at a branch with photo driving licence and utility bills to verify your ID, or whatever.

Anyway, my personal account is with First Direct, and they're a subsidiary of HSBC, and I've applied via HSBC, who are accepting applications for those with personal accounts if a copy of last year's tax return is scanned and uploaded to them. I'm assuming at the moment that a First Direct personal account will be treated as an HSBC account for the purposes of the loan.

Don't have a scanner to hand, and don't have a copy of my actual tax return, so I've had to improvise :idea:

But what a hassle getting a pdf together to upload. Last major hurdle when I spent about an hour putting the file together was that after waiting several minutes it finally told me the file was too big to upload. So had to start whole thing again from scratch :evil:

But it's been like that all day. I've spent most of today since 9am on this - it's like having a proper job again :-o

Anyway, fingers crossed [-o<


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PostPosted: Mon May 04, 2020 3:20 pm 
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Sussex wrote:
Quote:
Think I mentioned a few weeks back that my accountant just sends me one copy of my tax return to be signed, so I don't even have a copy at home ](*,)

I'm guessing you didn't get your Government Gateway password then?

Couldn't be bothered waiting for the thing to be sent by post, so didn't bother.


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