Small business owners including Barclays and Santander customers struggle to get ‘vital’ 100% bounce back loans
SMALL business owners, including Barclays and Santander customers, say they're still struggling to access vital bounce back loans three days since the scheme launched.
Others have blasted the initiative as unfair when, so far, only eight of the UK's major banking groups have signed up leaving customers of other banks locked out.
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It comes as new figures from chancellor Rishi Sunak reveal that more than 69,000 bounce back loans worth over £2billion were approved during the first 24 hours of the scheme.
But with the seven largest individual lenders signed up - Barclays, Danske, HSBC, Lloyds, RBS, Santander and Virgin Money - receiving more than 130,000 applications on the first day alone that means at least 61,000 applicants didn't get the promised funding within the first 24 hours.
Under the new scheme, which launched on May 4 and is available until November 4, firms can get loans worth up to 25 per cent of their turnover, up to a maximum of £50,000.
They're 100 per cent guaranteed by the government, and the government will cover the interest on the loans for the first 12 months, with firms able to pay back the remaining balance over the next five years at a 2.5 per cent interest rate.
While customers need to apply directly to their bank, the British Business Bank's website, which is co-ordinating the initiative, crashed for the first hour of the scheme launching.
And some small business owners have reported continuing problems since.
One Barclays customer tweeted this morning: "Tried for three days to get access to @Barclays for its bounce back loans and guess what still cant access it keeps saying error on the form phoned waited an hour or more still no help @MartinSLewis any advice or tips please? #losingtheplot #scaredbusinessowner"
Another said: "Eligible but @Barclays is not allowing me to process the bounce back loan. Same page keeps coming up and not sure why as everything is in order."
Someone else responded: "I’m getting exactly the same message. Been trying almost all night again. Come on Barclays I’m on rock bottom."
And someone else added: "I have exactly the same problem Cody [Barclays Bank worker] and can assure you my mandate and contact information are all 100% - no text from @barclays so what should I do?"
Barclays told us it's approved over 32,000 bounce back loans as of 4pm yesterday, but it wouldn't tell us how many people have applied and not yet been granted funding.
It added that it will proactively contact those who need to supply extra information or who have a more complex set-up, such as more than one signatory on the account.
But it's not just Barclays, some worried Santander customers say they're still waiting to find out if they're eligible for the scheme despite applying on Monday.
One person tweeted this morning: "Woke up this morning, still nothing at all. Applied 3pm Monday. I don’t think @santanderukbiz understand the stress small business owners are facing."
'Securing a short-term bounce back loan will be crucial'
RAFAEL Rozenson, pictured, launched his business, at the beginning of 2018.
His is stocked in a number of gyms - but all of these are now closed.
The 40-year-old businessman, who is a Starling customer, told The Sun he felt the government had left gaps in providing help which meant some businesses were missing out.
Until May 7, he couldn't qualify for bounce back loans as Starling hadn't joined the scheme and most lenders are only offering the support to their own customers to begin with.
He adds that he doesn't qualify for furlough as he's the director of a limited company, and he can't furlough himself as he still needs to work on the business. He doesn't employ any other staff.
"I am concerned about the future, as the majority of our customers have stopped trading and most of our major plans for 2020 have been cancelled," he explained.
"We aren’t eligible for the government's Coronavirus Business Interruption Loan Scheme (CBILS) either because like a lot of start-up businesses in our industry, we are still loss-making.
"That means we don't meet the financial criteria.
"We can defer payment of our VAT and this will be helpful although it is not massive amount - but there is not much else we qualify for.
"I was really excited when the bounce back programme launched as we are looking for a small loan to tide us over during the crisis.
"The next few months are really all about survival and securing the short-term bounce back loan will be crucial."
Another person added: "I still did not get the email. It is now almost 48 hours since I applied for the bounce back loan for my Santander business account. One on the advisors yesterday suggested that the application may be pending as a decision has not been made yet."
Santander says it's so far received 29,413 applications, has offered 19,795 loans worth a combined £559million, and has paid money into over 2,400 customers’ accounts.
It adds that there are "no widespread delays or technical issues" from its perspective with cash being paid within 48 hours of signed loan agreements being returned, but says some cases may take longer than others to review.
Other small business owners have been left disappointed that their lender isn't signed up.
One person tweeted: "We need an inquiry as to how the likes of @TideBusiness @RevolutBusiness @StarlingBank were allowed to disrupt British banking with @FSCS approval. Their customers are left without hope now as the same old-school limitations apply to these #BBL’s. #threadneedle #treblesallround"
Another wrote: "@hmtreasury This is such a bu***t! Many companies have business accounts with challenger banks, e.g. @TideBusiness and the currently accredited bank DO NOT provide loans to business who are not their customers!"
So far, the lenders signed-up are Bank of Scotland, Barclays, Clydesdale Bank, Danske Bank, HSBC, Lloyds Bank, NatWest, Santander, RBS, TSB, Ulster Bank, and Yorkshire Bank.
But some banks, including Barclays and Santander, are currently only taking applications from their own customers, although the Treasury says loans should be extended to non-customers as soon as possible.
What other help is there for businesses?
- The government has offered to furlough workers through its Coronavirus Job Retention Scheme, paying up to 80 per cent of wages up to £2,500 a month
- While self-employed workers can get up to 80 per cent of profits paid by the government for the next three months - again up to £2,500 a month
- Under the Coronavirus Business Interruption Loan Scheme, SMEs can get loans and overdrafts of up to £5 million for up to six years and the government with guarantee up to 80 per of these loans
- Small firms can get grants of up to £10,000 to help with ongoing business costs
- It has also announced VAT payments and self-assessment tax returns are deferred for three months
- SMEs that cannot afford their tax bills can ask HMRC for a “time to pay” arrangement so any debt collection is suspended
- And they can get up to two weeks’ sick pay - almost £200 per employee up to 250 staff members - refunded by the government.
- A 12-month business rates holiday has been introduced for many businesses
A HM Treasury spokesperson said: “Millions has already landed in people’s accounts and lenders are working hard to process and approve all applications as quickly as possible.
“All lenders are welcome to apply to the scheme, and we are working closely with the banks to ensure firms get the finance they need.”
A Barclays spokesperson added: “Since we went live the vast majority of our customers have been able to apply online and get same-day approval. There are some exceptions where customers will need to confirm additional details and we’re reaching out to them shortly to confirm the next steps.”
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A spokesperson for banking trade body, UK Finance said: "Bank staff have been working flat out since the scheme launched on Monday morning to process applications and get money out to eligible borrowers."
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The bounce back loan scheme is one part of the government’s package of business support that includes its coronavirus jobs retention scheme, business grants, VAT deferrals and scrapping businesses rates for some firms.
The British Business Bank declined to comment.