I want to answer one question that I get asked repeatedly about Bounce Back Loans today, for over the weekend the chances of you hearing/getting an update on an application you have put in for a business bank account and/or a Bounce Back Loan are not usually forthcoming from most banks, so I can spend a little bit of time on that question.
That question is whether you can pay yourself using the money from a Bounce Back Loan, well the simple answer to that question is YES, much more so if you are a Sole Trader, for you are the business. As for tax on the cash you draw down as your income from the loan, well you only pay tax on your profits and a loan is not a profit, so keep that in mind.
LTD’s need to be aware the loan is not yours, but the company’s and you should seek advice from your accountant as to the best way to approach paying yourself and drawing down cash from the business.
Keep in mind too that you are not the reason why you needed to apply for a Bounce Back Loan, the pandemic was the reason why they became available, and you should not in any way feel guilty about applying for one and accepting one or using the money to save your business and help your business prosper.
As a Sole Trader you may well spend months paying yourself from your Bounce Back Loan, and that is to be expected in some instances, for with new lock-downs happening in different towns and cities across the UK that is having a direct effect on businesses and causing severe financial pressure on many of them.
Ultimately it is a loan, but also remember that it is guaranteed by the Government, and you did have to confirm when applying that your business has/had been negatively affected by Covid-19, so if you cannot afford to pay it back then that is no fault of yours as both the lender and the guarantor knew when you took out the loan your business was experiencing a negative effect caused by the pandemic.
Banks are 100% aware that some people, and they are estimating huge numbers of people that took out Bounce Back Loans are not going to be able to pay them back and are right now looking at how they can manage that situation fairly and easily next year, and streamlining the process of utilizing the Government guarantee to them for repayment.
Just put together a plan of attack regarding using your BBL to help you bounce back and do your best to achieve your goals over the next 12 months and beyond, if it doesn’t work out, well you have tried and the Government will step in and pay it back for you if your business fails.
The headlines you will see in some newspapers of how people are using Bounce Back Loans to buy Ferrari’s etc, well take them with a pinch of salt, for most business men and women I have chatted to over the last few months that have applied for and have been given a BBL have used every penny to help them bounce back and are doing everything they possibly can do to bounce back.
I am sure there are some people that are living the high life on their Bounce Back Loans and there are some people who have obtained them fraudulently, that is a problem for the banks not you, but does somewhat explain why getting a business bank account is not as simple as you may have thought it would be. But if you are legit and meet the criteria for a Bounce Back Loan, the powers that be should do whatever they need to do to ensure you have access to one, which is not the case right now as many of you have discovered.
You can pay off existing business debt, in fact based on the low interest rate of a Bounce Back Loan you would be daft not to, and as mentioned above you can use the loan to help pay yourself wages, (Sole Traders can, if you are a LTD then check with your accountant as how to approach payments to yourself), buying stock in fact anything you need to spend the cash on to help your business through these difficult times.
I wish you all well with yours businesses, just have a plan of attack as I say with your Bounce Back Loan, and one tip, if you have had to battle hard for your loan, and those applying right now are often forced to battle all the way to get one, then when it finally arrives take a step back and breathe again, for the “come down” from the stress of it all often takes a good few days at least to get over, if not longer.
It is “helicopter money”, there is no doubt about that, and when money is sprayed around some lands exactly where it is needed and some lands on wasteland.
Been Declined a Bank Account or BBL?
Please read below for some reasons as to why you may be declined a bank account and/or a Bounce Back Loan with some lenders.
Many people who are declined tend to fear it is their credit rating/score that is the cause of a decline, and whilst that can and may play a part obviously, there can be a whole host of other reasons, some of which can be sorted out, and when the latter is the case you may find it much easier to open a bank account and/or obtain a Bounce Back Loan.
Some Lenders can and will and are in within their rights to decline anyone for an account and/or BBL based on their own criteria in additional to that laid down by the British Business Bank.
With that in mind, if you have checked all of the following and/or have been declined by one lender then you are also within your rights, and encouraged to apply to any other lender that is part of the Bounce Back Loan scheme.
Potential reasons not relating to credit score/rating
SIC Code – Not matching on companies house vs what you put in your application.
SIC Code – considered a reputational risk – you would be surprised how many business types fall into this category.
Directors/owners name(s) not matching companies house and/or
Voters roll e.g. Chris vs Christopher, as your middle name.
Business address not matching, has your accountant used their address to register? What is your correspondence address at companies house?
Business name not matching e.g. Ltd v limited
Recent changes of directorship and/or ownership – red flag at the moment due to BBL fraud
Markers registered against the company or director
Previous financial relationship with the bank or one its subsidiaries that did not end well
Compensation
Many Bounce Back Loan applicants that have been through hell and still are experiencing problems have been offered compensation from a bank ranging from £50 up to £2500 for the more complicated problems.
It is your choice as to whether you accept any offer of compensation and the amount you accept too.
Bank and Lender Updates
Be aware things can change in an instant at any bank and as such I will now give you an overview of how things are going with each bank, and let you know how and where to contact if you want to try and chase up your Bounce Back Loan application and find out where things stand with each bank.
Each bank will have their own criteria for opening accounts, and some lenders also have their own set of rules regarding who they will allow to open an account and/or apply for a Bounce Back Loan.
HSBC
They appear to have now launched their online Feeder Account Portal, which hopefully does away with the exceptionally long and drawn out process for applying for such an account.
Many people who had previously applied for a Feeder Account are still waiting for their call backs to set up the account, and/or to receive all related documents and many people are still waiting for payment.
HSBC Feeder Account Portal Link
Be aware many people have been declined for such an account when using that portal, and also when they have applied for a feeder account during the telephone interview for such an account.
Link to the HSBC BBL section of their Website
Useful Email Addresses for Contacting HSBC:
feeder.account.team@hsbc.com
Ian.Stuart@hsbc.com
Sally.A.Williams@hsbc.com
commercial.executive.complaints@hsbc.co.uk
amandamurphy@hsbc.com
marissa.k.adams@hsbc.com
julienapier@hsbc.com
feeder.account.team@hsbc.com
oliver.james.exley@hsbc.com
Lloyds
Lloyds continue to do what they do best, process, and pay out BBL applicants quickly and with no fuss or hassle.
Be aware that if you hold a Bank of Scotland or a Halifax or Lloyds personal bank account you can use the Onboarding Portal to get a Lloyds Business Account and then can apply for a Bounce Back Loan.
Be aware though the dates listed on the website, as you will have had to have a personal bank account in operation before those dates to be able to onboard with Lloyds, if you have opened an account after the dates you will not be able to use that onboarding system.
Halifax, Bank of Scotland, and Lloyds Onboarding Link
Lloyds CEO Email Address
vim.maru@lloydsbanking.com
Metro Bank
Metro Bank have now launched their Bounce Back Loan scheme, which is a sight to behold.
Due to the speed at which applicants are processed, and the rapid pay-outs too, many people wish they had an account with them, as their Bounce Back Loan journey would be an easy one for sure.
Metro Bank will let you register an interest in opening an account with them online and they will then make contact with you to arrange an appointment in one of their banks or ”stores” as they like to call them.
Applicants simply join an online queue and when it is their turn to apply for a Bounce Back Loan (which can be after a few hours), they then fill in the application form and once done they are then either approved on the spot, declined or told whether any additional information is required.
The feedback from many people is that Metro Bank are the game changer, as unlike most other banks people get to know at the end of their application their fate, without having to wait for days or weeks to discover what is going on with their application, as has been the case with other banks.
Visit the Metro Bank BBL Section of their Website
Email the CEO of Metro Bank Dan.frumkin@metrobank.plc.uk
Tide
Tide have run out of money to lend and are desperately scrambling around trying to raise more to increase the number of applications they can process, as such you can expect a huge delays before any application you have put in will be processed.
Visit the Tide BBL Section of their Website
Co-Op Bank
To be fair to the Co-Op not many people have been complaining about them, I have had a few here and there and some have been sorted out but every now and then I get someone appearing and asking for help.
Co-Op Bank CEO Email Address
chris.davis@co-operativebank.co.uk
Visit the Co-Op Bank BBL section of their Website
Yorkshire Bank and Clydesdale Bank
I get the odd complaint about both Yorkshire Bank and Clydesdale and it is always worth checking out their respective BBL sections of their websites for updates, seen reports of those banks taking applications for new bank accounts by the way, but check that out as it can change at any time.
Visit the Yorkshire Bank BBL section of their Website
Visit the Clydesdale Bank BBL section of their Website
Yorkshire Bank CEO Email Address
david.duffy@cybg.com
Clydesdale Bank CEO Email Address
david.duffy@cybg.com
Barclays
I am still getting all manner of weird and wonderful complaints about Barclays, it does appear though that many applicants now fly through their Bounce Back Loan system, but many are still experiencing problems with applying, getting paid and contacting the bank.
Visit the Barclays Bank BBL section of their Website
Barclays CEO Email Address
Jes.staley@barclays.com
NatWest and RBS
The usual complaints about NatWest and RBS, including poor communication, problems applying for a BBL and even people being declined. Once again you need to start haranguing the right people to have any chance of your problems being resolved.
They have been paying many applicants out obviously, so if you do manage to have a hassle free experience then you should get paid out fairly quickly, even if it is not in the time scale you had hoped for.
Be aware that you may apply, not hear anything and then out of the blue get an email saying they are so busy your application is being dumped and not looked at.
Visit the NatWest BBL section of their Website
Visit the RBS BBL section of their Website
NatWest / RBS CEO Email Address
Simon.Separghan@rbs.co.uk
Santander
Much like some of the above banks Santander have attracted plenty of complaints, but in all fairness many followers, and many long-time ones too have found emailing their CEO does get a response and their claims processed quickly. They too have also been dumping applicants via a mass cull type of email so be warned.
Visit the Santander BBL section of their Website
Santander CEO Email Address
nathan.bostock@santander.co.uk
Starling Bank
Starling Bank operate a waiting list type of system, however, be aware they have additional criteria of their own as to whom they will supply a Bounce Back Loan to. Therefore, there are no guarantees you will get a loan from them. They have declined many thousands of applicants.
Visit the Starling Bank BBL section of their Website
Skipton Building Society
Skipton Building operate a different business model than most mainstream lenders so you will need to check their website to find out more about what they have on offer to applicants.
Visit the Skipton Building Society BBL section of their Website
TSB
You will be asked to sign away your rights to be able to apply for a Bounce Back Loan if you try to open a new account with TSB. As such do not waste your time trying to get such an account with them if your intention is to apply for a TSB Bounce Back Loan.
Visit the TSB BBL section of their Website
TSB CEO Email Address
debbie.crosbie@tsb.co.uk
Other Bounce Back Loan Lenders
The following are other Bounce Back Loan Lenders, be aware I receive very few if any complaints about any of the following.
Visit the AIB BBL section of their Website
Visit the Bank of Ireland BBL section of their Website