Below is part one of all FOI’s received by and replied to by the British Business Bank, be aware that the Guarantee Agreement further down this page has been redacted by them where they deem such information is not for your/my eyes…..

Reference: FOI 20-074-1

07/10/2020

Dear

RE: Freedom of Information Request

Thank you for your freedom of information request received by the British Business Bank on 18th September 2020, where you requested the following information:

“I’m writing to make a request for information under the Freedom of Information Act 2000.

I would like to know what risk assessments have been made by the British Business Bank (BBB) for possible fraud under the Coronavirus Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Schemes.

In particular I would like to know if an assumption has been made by the BBB for the possible extent of fraud and error under the schemes for planning purposes.

I would also like to enquire what forecasts or provisions have been made by the BBB for the possible extent of unrecoverable loans made under the two schemes.”

Response:

We are treating your correspondence as a request for information under the Freedom of Information Act 2000 (‘the Act’). Under the Act you have the right to:

know whether we hold the information you require
be provided with that information (subject to any exemptions under the Act which may apply).

I would like to know what risk assessments have been made by the British Business Bank (BBB) for possible fraud under the Coronavirus Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Schemes.

Risk assessments have been undertaken across all three of the Schemes. The findings of the Bounce Back Loan Scheme risk assessment resulted in the British Business Bank writing to the Secretary of State for the Department for Business, Energy and Industrial Strategy (BEIS), in the form of a Reservation Notice, to express concerns about the proposed Scheme and the potential risk of fraud.

For reference the Reservation Notice is published at https://www.british-business- bank.co.uk/reservation-notice-for-the-bounce-back-loan-scheme/

In particular I would like to know if an assumption has been made by the BBB for the possible extent of fraud and error under the schemes for planning purposes.

The Bank and the government have considered the possible losses under the three schemes and these figures are published in the BEIS Annual Report and Accounts 2020: CBILS, 10-25%, CLBILS, 5-20%, BBLS, 35-60%. The initial indicative loss ranges are based on historic losses observed in prior programmes which most closely resemble the current COVID-19 interventions. However, no two programmes (or two economic downturns) are completely alike and the estimate will be revised as more data becomes available. This data will be used as an input into the loss forecasting models, which are currently being developed. Actual losses could be significantly different to forecast losses.

For reference the Accounts are published at https://www.gov.uk/government/publications/beis-annual- report-and-accounts-2019-to-2020 (pp.223-4)

The figures are combined estimates and do not distinguish between credit, fraud or error losses because it is not yet apparent what these figures might be as recipients are not required to start to make any repayment until after 12 months of the loan being drawn.

I would also like to enquire what forecasts or provisions have been made by the BBB for the possible extent of unrecoverable loans made under the two schemes.”

The Bank is working to the estimated loss figures above, but has been taking provisions to work alongside the government and the finance industry to mitigate the risks identified with the loan schemes, in particular those described in the Bounce Back Loan Scheme Reservation Notice.

Your right to complain under the Freedom of Information Act

If you are dissatisfied with the handling of your request, you have the right to ask for an internal review. Internal review requests should be submitted within two months of the date of receipt of the response to your original letter and should be addressed to: FOI Officer, British Business Bank, Steel City House, West Street, Sheffield, S1 2GQ or alternatively foirequests@british-business-bank.co.uk.

Please remember to quote the reference number above in any future communications.

If you are not content with the outcome of the internal review you may apply directly to the Information Commissioner’s Office (ICO) for a decision. Generally the ICO cannot make a decision unless you have exhausted our internal review procedure. The ICO can be contacted at: The Information Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF (www.ico.gov.uk).

Yours sincerely,

British Business Bank FoI Officer

Staffordshire	Newcastle- under-Lyme	76	1,688	1,764
Staffordshire	South Staffordshire	74	1,807	1,881
Staffordshire	Stafford	83	2,070	2,153
Staffordshire	Staffordshire Moorlands	56	1,454	1,510
Staffordshire	Tamworth	72	993	1,065

For reference, figures for the COVID-19 Schemes are also published by the British Business Bank and HM Treasury at the following web pages:

https://www.british-business-bank.co.uk/coronavirus-loan-schemes-benefiting- businesses-in-all-corners-of-uk-reveals-new-analysis-from-british-business-bank/
https://www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19- business-loan-scheme-statistics

If you have any further queries in relation to your request, please do not hesitate to contact us.

Your right to complain under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

If you are not content with the outcome of the internal review you may apply directly to the Information Commissioner’s Office (ICO) for a decision. Generally the ICO cannot make a decision unless you have exhausted our own complaints procedure. The ICO can be contacted at: The Information Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow Cheshire SK9 5AF www.ico.gov.uk

Yours sincerely,

British Business Bank FoI Officer [foirequests@british-business-bank.co.uk]

The response to your request of September 28th would have confirmed that information was not held; we do not yet know the total number of cases for fraud or error; nor the total of fraudulent claims; nor the numbers of reported cases to the police authorities. However, during the course of the request, information was received that fell within scope of the request and, although we are only required to provide information held at the time of the request, we felt it would be remiss to subsequently confirm no information was held.

We can confirm monthly fraud reports are being received from lenders for the Bounce Back Loan Scheme. Lenders have provided BBB with an indication of the number of Bounce Back Loan applications that were not awarded due to fraud prevention controls and, as of the end of October 2020, the figures were:-

prevented fraud cases: number of loans 26,933, and
prevented fraud: value: £1,107,329,960.

This information was submitted to the Public Accounts Committee on November 5th 2020 in relation to the Bounce Back Loan Scheme and the full letter and context is available at https://committees.parliament.uk/work/622/covid19-the-bounce-back-loan- scheme/publications/3/correspondence/

With regards to your questions, we can confirm:

1) Please state the total value in Covid-related loans written off as losses due to a) fraud, and b) error

The information is not held. We do not have a figure or value for the number of loans that have been written off as losses due to fraud or error. To date, no loans have been written off under the CBILS or CLBILS Scheme. In the case of Bounce Back Loans, the majority cases will not become evident until after the initial twelve-month payment holiday period, at which point initial payments will become due. Future Fund, cases will start to become known towards the Maturity Date (being thirty six months after the date of the convertible loan agreement) where loans which have not converted into shares will either convert or, at the Future Fund’s election, will be repayable with a Redemption Premium.

The BEIS Annual Report published on 30 September contained information on all debt loan schemes and potential loss estimates. For the Bounce Back Loan Scheme, losses were estimated as of 11 September 2020 to be in a range of 35-60%, which includes both credit and fraud losses. This reflects BBB’s initial estimates of the range of potential losses in a central scenario. The initial indicative loss ranges are based on historic losses observed in prior programmes which most closely resemble the current Covid-19 interventions. However, no two programmes (or two economic downturns) are completely alike, and the estimate will be revised as more data becomes available.

2) Please state the total number of Covid-related loans made by the British Business Bank that were fraudulently obtained by applicants from 1st February 2020 to date.

The information is not held. Work is underway in collaboration with the Lenders and other Government Departments to help address the issues of fraud, but it will take time before we are able to determine the total number of potentially fraudulent applications.

3) Please state the number of reports of fraudulently obtained Covid-related loans that the British Business Bank has made to police authorities from 1st February 2020 to date.”

We have provided information to the police authorities about the loans, where we have been able to do so. Lenders are responsible for following existing statutory and regulatory requirements and their internal protocols when reporting potential fraud to the appropriate authorities.

After careful consideration, we believe the information we hold in relation to the police investigations to be exempt under FOI Section 31 because its disclosure could prejudice law enforcement and potentially an investigation.

Section 31 provides information is exempt if it would be likely to:-

Prejudice the apprehension of offenders and/or;
Make the schemes more susceptible to fraud if it is perceived that fraud is either unlikely to be detected or

We recognise that there is a general public interest in the disclosure of information, as greater transparency makes Government more accountable. Against this there is a public interest in the effectiveness of law enforcement. A disclosure of information under the Act releases that information into the public domain and so is in effect, release to the public at large.

The British Business Bank has therefore concluded that release of this information would result in a risk of an increase of fraudulent applications and/or the apprehension of offenders.

Information on Section 31 is available on the ICO’s website here: https://ico.org.uk/media/for- organisations/documents/1207/law-enforcement-foi-section-31.pdf

If you have any queries about the handling of your request, please let us know.

Your right to an Internal Review under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

If you are not content with the outcome of the internal review you may apply directly to the Information Commissioner’s Office (ICO) for a decision. The ICO cannot help you until you have completed our internal review procedure. The ICO can be contacted at: The Information Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF or see their website for alternative contact details: www.ico.org.uk.

Yours sincerely,

British Business Bank FoI Officer

When we apply an exemption, we are required to explain what the exemption is and why it applies.

Section 29 – the Economy

Section 29(1)(a) exempts information if its disclosure would, or would be likely to, prejudice the economic interests of the UK or any part of it. This is a qualified exemption and requires a prejudice- test and public interest test.

We note there is a general public interest in disclosure of information concerning the use of public funds, and transparency is important to maintain and help build public trust in, and engagement

with, the government and its representatives. However, we believe that the release of the PwC Report would be likely to prejudice the UK’s economic interests insofar as it could provide information which could be useful to individuals or groups seeking to potentially defraud a Government support scheme. Therefore, we the take the view that the likelihood of the prejudice would be likely, especially as the BBLS is still operational, and the balance of public interest lies in withholding the information.

Section 31 – Prejudice to law enforcement

Section 31(1)(a) allows information to be exempt if its disclosure would or would be likely to prejudice the prevention or detection of crime and to protect society from crime and its impact. This is a qualified exemption and requires a prejudice-test and public interest test.

The likelihood of the prejudice is considered high. Fraud is a significant crime, costing the UK economy approximately £190 billion a year, and it was identified that the BBLS was at high risk of potential fraud. As mentioned previously, the public interest is also high because of the substantial amounts being loaned under BBLS. The public interest is already being satisfied to some extent with the publication of information about BBLS, e.g. its take-up and implementation, National Audit Office Investigation Report, Public Accounts Committee, but the release of the risk report that sets out the specific concerns and accompanying details, may facilitate the commission of an offence, for example being able to commit potential fraud. Therefore, we take the view that the balance of interest lies in withholding the information.

For reference the information publicly available about BBLS includes:

HM Treasury publishes figures for the number of loan applications and their total value: https://www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan- scheme-statistics
BBB published its Reservation Notices of its concerns in relation to the BBLS and Future Fund Schemes: https://www.british-business-bank.co.uk/british-business-bank-publishes- reservation-notice-and-ministerial-direction-for-the-bounce-back-loan-scheme/ and https://www.british-business-bank.co.uk/reservation-notice-for-the-future-fund/
Department for Business, Energy and Industrial Strategy (BEIS) published its Annual Report and Accounts, which includes loss estimates for all of the Covid-19 Loan Schemes: https://www.gov.uk/government/publications/beis-annual-report-and-accounts-2019-to-2020
National Audit Office published its Investigation into the BBLS: https://www.nao.org.uk/report/bounce-back-loan-scheme/
Public Accounts Committee on November 5th 2020 in regards to the BBLS with representation from HM Treasury, Department for Business, Energy and Industry Strategy (BEIS) and BBB, which discussed the losses and potential fraud risks: https://committees.parliament.uk/event/2526/formal-meeting-oral-evidence-session/.
National Crime Agency highlighting the risk and cost of fraud to the UK: https://nationalcrimeagency.gov.uk/what-we-do/crime-threats/fraud-and-economic-crime

Section 43(2) – Prejudice to commercial interests

Section 43(2) provides that information is exempt if its disclosure would, or would be likely to, prejudice the commercial interests of a person; a person can be an individual or any legal entity. In this case, the disclosure of the risk report would be likely to prejudice the commercial interests of BBB and of the lenders taking part in the work carried out by PwC.

PwC were commissioned to discuss the proposed BBLS with lenders and, as confirmed in the BBLS Reservation Notice, produced a report of the discussions and the potential fraud risks for the Scheme. The disclosure of the Report would thus highlight the details of the lender specific concerns, the loan application process, and potential fraud risk scenarios; information that could be used to defraud the BBLS or any other scheme on offer. With regards to the prejudice of BBB commercial interests, our objective is to work with the finance industry to provide finance to the smaller markets. The disclosure of information, which is not intended for the public domain, that prejudices the lenders commercial interests may also prejudice BBB’s interests if the lenders are less willing to work with us in the future. Given the nature of the risk report and the ongoing operation of the BBLS, the public interest is not served by disclosing information that may enable someone to commit fraud. Therefore, we take the view the balance of interest lies in withholding the information.

If you have any queries about the handling of your request, please let us know.

Your right to an Internal Review under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

Yours sincerely,

British Business Bank FoI Officer

Reference: FOI 20-087-1

4th December 2020

Dear

RE: Freedom of Information Request

Thank you for your freedom of information request received by the British Business Bank on 9th October 2020, where you requested the following information:

“Under the Freedom of Information Act and in reference to data which you publish, here: https://www.british-business-bank.co.uk/coronavirus-loan-schemes-benefiting-businesses-in-all- corners-of-uk-reveals-new-analysis-from-british-business-bank/, I would like to know the following:

For both the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS):

The total value of loans broken down by sector
The number of loans broken down by sector

Please provide this data broken down, in order of preference, by either:

Parliamentary constituency
Local authority
Postcode (first letter postcodes, for example N1, N2, N3)”

Response:

We are treating your correspondence as a request for information under the Freedom of Information Act 2000 (‘the Act’). Under the Act you have the right to:

know whether we hold the information you require
be provided with that information (subject to any exemptions under the Act which may apply).

We can confirm that information is held within the scope of your request.

We are withholding the requested information as we consider that the disclosure of this information would be likely to prejudice commercial interests and that the exemption in section 43(2) of the Act therefore applies. If the data requested was released under the Freedom of Information Act, this could result in the names of companies who have received a loan being able to be identified, in cases where:-

there are few companies within a specific sector and/or;
where all companies within a specific geographical location and the same sector have successfully applied

Relevant commercial interests include those of i) The British Business Bank; ii) Coronavirus Business Interruption Loan Scheme and Bounce Back Loan Scheme accredited lenders and iii) Loan beneficiaries of the Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme.

We recognise that there is a general public interest in the disclosure of information, as greater transparency makes Government more accountable. Against this there is a public interest in ensuring that the commercial interests referred to above are not damaged or undermined by disclosure of information which is not common knowledge, and which could adversely impact these commercial interests. A disclosure of information under the Act releases that information into the public domain and so is in effect, released to the public at large.

We have concluded that disclosure of this information could damage and adversely affect the commercial interests referred to above. We consider that the public interest in favour of disclosing this information is outweighed by the necessity to protect commercial interests. The British Business Bank’s decision is therefore to withhold this information.

If you have any further queries in relation to your request, please do not hesitate to contact us.

Your right to complain under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

If you are not content with the outcome of the internal review you may apply directly to the Information Commissioner’s Office (ICO) for a decision. Generally the ICO cannot make a decision unless you have exhausted our own complaints procedure. The ICO can be contacted at: The Information Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF www.ico.org.uk.

Yours sincerely,

British Business Bank FoI Officer foirequests@british-business-bank.co.uk

know whether we hold the information you require
be provided with that information (subject to any exemptions under the Act which may apply).

I can confirm we hold information and up to September 30th is as follows:

£37,232,259, 926 drawn loans to 915 businesses
£46,282,565, 1,174 drawn loans to 1,163 businesses
£25,876,430, 92 drawn loans to 89 businesses
£28,835,085, 122 drawn loans to 117 businesses

If you have any further queries in relation to your request, please do not hesitate to contact us.

Your right to complain under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

Yours sincerely,

British Business Bank FoI Officer

Reference FOI 20-089-2

30 November 2020

Dear

RE: Freedom of Information Request

Thank you for your freedom of information request received by the British Business Bank (BBB) on 13 October 2020, where you requested:

“In the BBLS reservation notice sent to the Secretary of State for BEIS there is reference to the following correspondence, please could you provide me copies of the following:

Link to reservation notice: https://www.british-business-bank.co.uk/wp- content/uploads/2020/09/200502-BBB-BBLS-reservation-notice-FINAL-tagged.pdf

M Morgan’s letter of 26th April to Sam Beckett advising on the risks associated with the rapid launch of BBLS.
The subsequent email of 1st May that set out in more details the very significant fraud and credit risks associated with
Furthermore: Please also send me a copy of the PWC Fraud Risk Review that is mentioned in the ”

Response:

Under the Freedom of Information Act 2000 (‘FOIA’), you have the right to:

know whether we hold the information you require, and
be provided with that information or an explanation to what exemption(s) apply

As per our initial response on November 11th, we hold the information, but required an extension of time to consider the public interest test for FOIA sections 29, 31 and 43.

After careful consideration, we believe the information you requested is exempt from disclosure under FOIA sections 29 (the economy), 31 (law enforcement), and 43 (prejudice to commercial interests).

The correspondence and the reports contain a lot of the same information, in particular details of the potential risks associated with the proposed scheme, which if disclosed could be used to potentially defraud a government scheme as well as prejudice the commercial interests of the Government and the lenders and have implications for the national economy.

We have considered whether the documents can be redacted, but the contents of the unredacted information would be general in nature and are available elsewhere, for instance:

The BBB Reservation Notice to the Secretary of State includes the original concerns Keith Morgan raised in correspondence with Sam Beckett about the speed in which to implement the scheme, the fraud and credit risks associated, and the potential market distortion, which resulted in the Reservation Notice: https://www.british-business-bank.co.uk/british-business- bank-publishes-reservation-notice-and-ministerial-direction-for-the-bounce-back-loan-scheme/
The National Audit Office BBLS Investigation Report provides an overview of the scheme and potential fraud risks, see https://www.nao.org.uk/report/bounce–back-loan-scheme/.
The Public Accounts Committee, dated 05 November 2020, discusses the scheme, estimated losses and potential fraud risk concerns. The transcript and accompanying evidence are published at Covid-19: The Bounce Back Loan Scheme – Committees – UK Parliament.

When we apply an exemption, we are required to explain what the exemption is and why it applies.

Section 29 – the Economy

We note there is a general public interest in disclosure of information concerning the use of public funds, and transparency is important to maintain and help build public trust in, and engagement with, the government and its representatives. However, we believe that the release of the

correspondence and the PwC Report would be likely to prejudice the UK’s economic interests insofar as it could provide information which could be useful to individuals or groups seeking to potentially defraud a Government support scheme. Therefore, we the take the view that disclosure would be likely to result in prejudice and that the balance of public interest lies in withholding the information.

Section 31 – Prejudice to law enforcement

The likelihood of the prejudice is considered high. Fraud is a significant crime, costing the UK economy approximately £190 billion a year, and it was identified that the BBLS was at high risk of potential fraud. As mentioned previously, the public interest is also high because of the substantial amounts being loaned under BBLS. The public interest is already being satisfied to some extent with the publication of information about BBLS, e.g. its take-up and implementation, National Audit Office Investigation Report, Public Accounts Committee, but the release of the correspondence and the risk report that set out the specific concerns and accompanying details, may facilitate the commission of an offence, for example being able to commit potential fraud. Therefore, we take the view that the balance of interest lies in withholding the information.

In addition to the links already mentioned, other information publicly available about BBLS includes:

HM Treasury publishes figures for the number of loan applications and their total value: https://www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan- scheme-statistics
Department for Business, Energy and Industrial Strategy (BEIS) published its Annual Report and Accounts, which includes loss estimates for all of the Covid-19 Loan Schemes: https://www.gouk/government/publications/beis–annual-report-and-accounts-2019-to-2020
National Crime Agency highlighting the risk and cost of fraud to the UK: https://nationalcrimeagency.gov.uk/what-we-do/crime-threats/fraud-and-economic-crime
UK Finance highlighting the COVID-19 scams: UK Finance reveals ten Covid-19 scams the public should be on high alert for | UK Finance

Section 43(2) – Prejudice to commercial interests

PwC were commissioned to discuss the proposed BBLS with lenders and, as confirmed in the BBLS Reservation Notice, produced a report of the discussions and the potential fraud risks for the Scheme. The disclosure of the Report would thus highlight the details of the lender specific concerns, the loan application process, and potential fraud risk scenarios; information that could be used to defraud the BBLS or any other scheme on offer. With regards to the prejudice of BBB commercial interests, our objective is to work with the finance industry to provide finance to the smaller markets. The disclosure of information, which is not intended for the public domain, that prejudices the lenders’ commercial interests may also prejudice BBB’s interests if the lenders are less willing to work with us in the future. Given the nature of the risk report and the ongoing operation of the BBLS, the public interest is not served by disclosing information that may enable someone to commit fraud. Therefore, we take the view that the balance of interest lies in withholding the information.

If you have any queries about the handling of your request, please let us know.

Your right to an Internal Review under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

Yours sincerely,

British Business Bank FoI Officer

Reference FOI 20-090-1

14 December 2020

Dear

RE: Freedom of Information Request

Thank you for your freedom of information request received by the British Business Bank (BBB) on October 3rd, where you requested:

“(1) Please could you send me the reports compiled by RSM and KPMG who have been hired by the BBB to conduct an audit of recipients of the BBLS, CBILS, CLBILS and the Future Fund to check for fraud and applicants who do not qualify for the loans.

As reported in The Telegraph and consultancy.org (see news story here: https://www.consultancy.uk/news/25448/consultants-hired-to-check-covid-19-rescue-loans-for-fraud)

If a report has not been compiled, or it is not possible to send it to me. Could you please send me (2) the number of cases flagged by the two consultancy firms to be fraudulent/ unqualified recipients and the (3) total loan value of the flagged cases.

Could you also send me the names of the businesses who have fraudulently claimed
Could you send me the amount that has recovered from fraudulent/unqualified loans
Finally, could you send me all correspondence between the BBB and RSM & KPMG regarding the audit into these ”

Response:

Under the Freedom of Information Act 2000 (‘FOIA’), you have the right to:

know whether we hold the information you require, and
be provided with that information or an explanation to what exemption(s) apply

As per our initial response on November 3rd, we hold some of the information you requested and required an extension of time to consider the public interest test under the qualified exemptions of section 29, 31 and 43.

KPMG and RSM have been contracted for audit purposes and correspondence and audit reports are held. The audits are not audits of recipients of the Covid 19 response schemes. Instead, the audit reports assess operational activity within the lending organisations as to whether the Lenders have complied with the Scheme requirements which are applicable to them. The reports include examples to substantiate their findings, for instance that required AML/KYC and fraud prevention checks have taken place, but it is not the job of the auditors to investigate fraud/unqualified recipients or to report on the quantum of potential fraud.

After careful consideration, we believe the audit reports, their contents, and the correspondence between BBB and auditors are exempt under FOIA sections 41 and 43.

When we apply an exemption, we are required to explain what the exemption is and why it applies.

Section 41 – Information provided in confidence

Section 41 of the FOIA provides information is exempt if it has been provided to the public authority by a third party and its disclosure would constitute a breach of confidence. The audit reports and correspondence have been provided by KPMG and RSM and therefore have been received by a third party. We believe the disclosure would constitute a breach of confidence and as per Section 41, we have considered the following three points:

Whether the information has the quality of confidence. BBB has contracted KPMG and RSM for audit purposes. The audit reports and correspondence contain detailed information that is commercial in nature, is not trivial and not accessible to the public. Thus, the information has the quality of
Whether the information was imparted in circumstances importing an obligation of confidence. BBB has contracted KPMG and RSM for audit purposes. The audit reports and correspondence are carried out under contract and their disclosure to the public likely to be construed as a breach of contract. Thus, the information provided to BBB is in circumstances importing an obligation of
Whether the disclosure would be an unauthorised use of the information to the detriment of the confider. BBB has contracted PMG and RSM for audit purposes. The information provided is intended for BBB. The disclosure of the audit reports or information contained therein to the general public would be an unauthorised use to the detriment of the confider as well as

Section 41 is designed to give third parties who provide confidential information to public authorities, a degree of assurance that their confidences will continue to be respected, should the information fall within scope of an FOIA request. It is an absolute exemption, so there is no public interest to be carried out under FOIA, but there is a need to carry out a test to determine if it is in the public interest to defend the breach of confidence.

There is a public interest in preserving the duty of confidentiality, so the public interest must be high when deciding whether to release information that would constitute a breach of confidence. In this case, there is public interest in the way the Covid-19 loan schemes have been delivered because of the substantial sums of money involved, but this has been met to some degree as information about the estimated losses, potential for fraud and error has been published e.g. National Audit Office, Public Accounts Committee, Reservation Notice, BEIS Annual Report and Accounts 2019 – 2020. The Government, BBB and lenders recognise the associated risks and are working on fraud prevention activities, so it in the public interest for these parties to work efficiently and effectively and not be disrupted or harmed with potential or actual legal action for a breach of confidence or the reluctance to share information in the future. We therefore take the view that the public interest currently lies in maintaining the duty of confidentiality and not to release the audit reports.

Section 43(2) – Prejudice to commercial interests

Section 43(2) provides that information is exempt if its disclosure would, or would be likely to, prejudice the commercial interests of a person; a person can be an individual or any legal entity.

BBB contracted KPMG and RSM for audit purposes and has corresponded with both parties in preparation for, and delivery, of the audit requirements. The disclosure of the correspondence and the information contained in the audit reports would be likely to prejudice the commercial interests of all three parties:

The lender as the information contains information commercial and operational information, which if disclosed may provide a competitor unfair advantage to how the lender operates and also give rise to the risk of the disclosed information being taken out of context to the detriment of the lender, affecting their reputation and business
The auditors as they work on the premise of confidentiality, soliciting sensitive information from organisations being audited, to properly assess the operation and performance of the audited companies. The disclosure of the information would be likely to give rise to the perception the auditors cannot guarantee confidentiality, which in turn may inhibit the engagement of clients during an audit, and possibly impact future business
BBB as it works with lenders to deliver the Covid-19 loan schemes. The disclosure of information that is exempt and likely to impact the commercial interests of the lenders, would also impact the commercial interests of the BBB if lenders (and any other delivery partners) were less willing to work with BBB in its objective to make finance markets work better for smaller

Section 43 is a prejudice exemption and we consider the prejudice would be likely to happen if the information was disclosed. Section 43 is also a qualified exemption and requires a public interest test to consider if the public interest is in the disclosure of the information or in maintaining the exemption.

Public Interest Test

Both parties consider the correspondence to be provided as part of the contract with a reasonable expectation of confidence, which if disclosed would be likely to result in speculation about the audit activity, the way of working and the intended programme of work, and potentially affect the audit companies future business opportunities. With regards to BBB, the disclosure of the correspondence including the attachments, would mean disclosing detailed information about the scheme and lenders, which could affect its standing with the lenders and the auditors and potentially impact on the Bank’s reputation and future commercial interests when seeking to work with third parties. Therefore, we take the view that the balance of interest lies in withholding the information.

Likelihood of prejudice

Relying on Section 43(2) requires us to consider the likelihood of the prejudice and whether it ‘would’ or ‘would be likely to occur’. We believe the prejudice ‘would be likely to occur’ as there is interest in the way the loan schemes have been delivered with the sums of money involved and the information likely to be published and speculated on.

Public Interest Test

The purpose of the public interest test is to consider the circumstances of the request and weigh the public interest in maintaining the exemption against the public interest in disclosure. The public interest means the public good, not what is of interest to the public, and not the private interests of the requester.

The public interest factors in favour of disclosing the information:

There is always a general public interest in transparency and how Government and public authorities operate, make decisions and spend money, and the purpose of the Freedom of Information Act is to enable the public to ask questions, be informed and engage with decisions and affairs that affect the public and society as a
There is public interest in the loan schemes because of the number of loans awarded and the sums involved. Although it is the lenders’ money being loaned, the Government has agreed to pay the first 12 months of interest payments and cover 80% or 100% of the loans
There is a public interest in protecting public money and preventing and combating financial crime including The speed of the introduction of the loan schemes, the number and value of the loans and the ongoing economic uncertainty has given rise to concerns about the estimated losses and potential for fraud.

The public interest factors in maintaining the exemption:

There is a public interest is preventing any prejudice-based detriment. We have concerns that the release of the audit information and correspondence would have an adverse impact on all the parties and potentially make them less willing to engage in the loan schemes and the loan recovery and fraud prevention work that is
There is a public interest in tackling fraud and financial crime and information has already been published, via the National Audit Office Investigation and the Public Affairs Committee, and further information is likely to be published in the future, for example the Department for Business, Energy and Industrial Strategy Annual Accounts and Reports 2019-20 published the estimated losses for each loan
Finally, the financial services industry is an important part of the UK economy and there is a strong public interest in ensuring the financial sector can operate effectively. Lenders have established processes to monitor, report and investigate concerns without the need for specific details to be disclosed to the

On review of the factors above, we believe the public interest test favours maintaining the exemption, hence the decision not to release the audit reports, the information they contain or the correspondence between BBB and the auditors in the view it would prejudice all the parties commercial interests.

If you have any queries about the handling of your request, please let us know.

Your right to an Internal Review under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

Yours sincerely,

British Business Bank FoI Officer

Reference FOI 20-094-1

16 December 2020

Dear

RE: Freedom of Information Request

Thank you for your freedom of information request received by the British Business Bank (BBB) on October 21st, where you requested:

“In the NAO report investigating the Bounce Back Loan Scheme, reference is made to the following documents. Please could you send the following for the Bounce Back Loan Scheme and where applicable, the Coronavirus Business Interruption Loan, Coronavirus Large Business Interruption Loan & The Future Fund.

Documents related to the accreditation process for lenders
The lenders post-accreditation audits
Correspondence and documents on the fraud prevention forums Please provide this information in an electronic ”

Response:

Under the Freedom of Information Act 2000 (‘FOIA’), you have the right to:

know whether we hold the information you require, and
be provided with that information (subject to any exemptions under the Act that may apply)

We wrote to you on the 18 November to confirm we were extending the deadline to consider the public interest test for the qualified exemptions of FOIA section 31 (law enforcement) and 43 (prejudice to commercial interests), which we have now completed.

We publish general guidance about the COVID-19 loan schemes and the Future Fund on our website under ‘Our Programmes’, which provides information about the loan schemes and the Future Fund, how to apply, how to become an accredited lender and the accreditation process, as well as information for the borrowers, investors and companies. For reference, the ‘Our Programmes’ web page can be accessed from our Web Home Page at Homepage – British Business Bank (british- business-bank.co.uk).

We also hold information which prospective lenders have given to us during the accreditation process, which may include supplementary evidence or information from a due diligence oroperational review. The latter includes details of lenders’ business and financial status, risk management and compliance framework, ownership structure, sources and cost of funding, track record and proposed lending strategy, including pricing and fee structures. This information falls in scope of your request, but we consider it to be exempt from disclosure under FOIA section 41 (information provided in confidence) and section 43 (prejudice to commercial interests).

We also hold information for the post-accreditation audits. BBB has contracted external auditors to assess the operational activity within the lending organisations as to whether the lenders have complied with the loan scheme requirements which are applicable to them. After careful consideration, we consider the audit reports to be exempt under FOIA section 41 (information provided in confidence) and section 43 (prejudice to commercial interests).

We also hold information for the fraud prevention forums. BBB works with lenders and government departments to identify and tackle the fraud risks associated with the loan schemes. Again, after consideration, we consider the information held to be exempt under FOIA section 43 (prejudice to commercial interests) and 31 (law enforcement).

When we apply an exemption, we are required to explain what the exemption is and why it applies.

Section 41 – Information provided in confidence

Section 41 states that information is exempt from disclosure if it was obtained from any other person and the disclosure of the information to the public by the public authority holding it would constitute a breach of confidence actionable by that or any other person.

We believe the information provided to BBB by the (a) lenders as part of the accreditation process, and (b) KPMG and RSM as part of the post-accreditation audit work, is subject to FOIA section 41. When considering if disclosure would constitute a breach of confidence, we must consider the following three points:

Whether the information has the quality of confidence.

The information provided by the lenders and the auditors as part of the accreditation process and post-accreditation audits is detailed information about the lender’s business operations (including prices sensitive information), commercial decisions and governance. The information provided by the lenders and the auditors is not trivial and not publicly accessible and therefore has the quality of confidence.

Whether the information was imparted in circumstances importing an obligation of confidence.

Lenders undergoing the accredited process for the loan schemes are taking steps to enter in to contract with the Department for Business Strategy, Energy and Industrial Strategy (BEIS), as the Loan Guarantor. BBB acts as agent to BEIS to deliver the schemes and processes the lenders’ information to carry out the necessary checks and due diligence to accredit the lender. The information is obtained as part of pre-contract proceedings and lenders have the reasonable expectation of confidence that the information provided is not made accessible to the
KPMG and RSM are contracted with BBB to carry out post-accreditation audits. The information provided during the audit and presented to BBB is imparted in a contractual circumstance and both the lenders and the auditors have the reasonable expectation of confidence that the information is not accessible to the

Whether the disclosure would be an unauthorised use of the information to the detriment of the confider.

The disclosure of the information provided by the lenders as part of the accreditation process and post-accreditation audits is likely to be to their detriment. Disclosure may give rise to speculation about their operations, credit and pricing decisions, commercial standing, interests and priorities, governance and risk model and appetite, which may result in a competitor gaining a commercial advantage or the potential for information to be misused, misinterpreted or misunderstood resulting in unfair speculation and potentially affecting their reputation in the marketplace.
The disclosure of the audit reports would also be considered a misuse of the information as KPMG and RSM carry out audits with a degree of confidentiality. If the audit reports are disclosed to the public, it may impact their terms of agreement they have undertaken with the lenders as part of the audit

Section 41 is designed to give those who provide confidential information to public authorities, a degree of assurance that their confidences will continue to be respected, should the information fall within the scope of an FOIA request. It is an absolute exemption, so there is no public interest to be carried out under FOIA, but there is a need to carry out a test to determine if it is in the public interest to defend the breach of confidence.

There is a public interest in preserving the duty of confidentiality, so the public interest must be high when deciding whether to release information that would constitute a breach of confidence. In this case, there is public interest in the way the Covid-19 loan schemes have been delivered because of the substantial sums of money involved, but this has been met to some degree as information about the estimated losses, potential for fraud and error has been published e.g. National Audit Office, Public Accounts Committee, Reservation Notice, BEIS Annual Report and Accounts 2019 – 2020. The Government, BBB and lenders recognise the associated risks and are working on fraud prevention activities, so it is in the public interest for these parties to work efficiently and effectively and not be disrupted or harmed with potential or actual legal action for a breach of confidence or the reluctance to share information in the future. We therefore take the view that the public interest currently lies in maintaining the duty of confidentiality and not to release the audit reports.

Section 43 – Prejudice to commercial interests

Section 43(2) provides that information is exempt if its disclosure would or would be likely to prejudice the commercial interests of a person; a person can be an individual or any legal entity. We believe the information provided to BBB by the (a) lenders as part of the accreditation process, and (b) KPMG and RSM as part of the post-accreditation audit work, and (c) the fraud prevention forums, is subject to section 43(2) because it would prejudice the commercial interests of:

The Lenders: Provide detailed information as part of the accreditation process and for the post- accreditation audit. The information is commercial in nature detailing financial circumstances and interests, business operations, lending history and track record, risk and governance management. Disclosure of the information obtained from the accreditation process, the post-accreditation audit as well as the fraud prevention forum would be likely to lead to speculation about the lender; provide competitors an insight into the lenders business and potentially be given an unfair advantage; provide fraudsters the potential opportunity to look for and exploit ways to commit fraud; impact the lenders current and future business opportunities and interests, especially if information is misused or misunderstood potentially affecting their reputation.

The Auditors: KPMG and RSM work on the premise of confidentiality, soliciting sensitive information from organisations being audited, to properly assess the operation and performance of the audited companies. Disclosure of the information would be likely to give rise to the perception the auditors cannot guarantee confidentiality, which in turn may inhibit the engagement of clients during an audit, and possibly impact future business opportunities.

BBB: work with lenders and other stakeholders to deliver the scheme, assess its effectiveness and to tackle the risk of fraud and other financial crimes. This involves developing trusted working relationships to ensure parties are engaged and share information to understand the risks and actions needed. Disclosure of the information related to the lenders accreditation process, post-accreditation audit or the fraud prevention forums, would be likely to impact BBB relationships with the lenders as well as with the government departments and law enforcement agencies involved in tackling fraud and may make them less inclined to share information.

In addition, BBB is the UK Government’s economic development bank, which has the objective to help finance markets work better for small businesses across the UK. The misuse or wrongful disclosure of lender information would be likely to impact on its current or future relations with partners in the SME finance market, such as Banks, Responsible Finance Providers, Leasing Companies, Venture Capital Funds, Invoice Finance Providers, Asset Finance Providers and Web-Based Financial Platforms, which in turn would affect the BBB commercial interests in delivering finance to small businesses.

Likelihood of prejudice

Public Interest Test

The public interest factors in favour of disclosing the information:

There is always a general public interest in transparency and how Government and public authorities operate, make decisions and spend money, and the purpose of the Freedom of Information Act is to enable the public to ask questions, be informed and engage with decisions and affairs that affect the public and society as a whole.
There is public interest in the loan schemes because of the number of loans awarded and the sums involved. Although it is the lenders’ money being loaned, the Government has agreed to pay the first 12 months of interest payments and cover 80% or 100% of the loans
There is a public interest in protecting public money and preventing and combating financial crime including fraud. The speed in which the loan schemes were introduced, the number and value of the loans, and the ongoing economic uncertainty has given rise to concerns about the estimated losses and potential for fraud. Hence there is public interest in knowing the lender accreditation process is robust and efforts taken to prevent or combat

The public interest factors in maintaining the exemption:

There is a public interest in preventing any prejudice-based detriment. The release of information that prejudices commercial interests may result in a reluctance from finance partners to work with public authorities, in this case BBB and its continued delivery of the loan schemes which have seen over 4 million loans awarded to businesses facing acute financial pressures.
There is a public interest in knowing prospective lenders must undergo due diligence to ensure they meet the requirements of the relevant loan scheme(s) or Future Fund Scheme; the requirements are published on our web site under Our
BBB and lenders have the reasonable expectation that the accreditation process and post- accreditation audit are carried out with a degree of confidence and the release of detailed information about lender operations may present an opportunity for someone to misuse or defraud a government loan
There is a public interest in tackling fraud and financial crime and information has been published, via the National Audit Office Investigation and the Public Affairs Committee, and further information is likely to be published in the future, for example the Department for Business, Energy and Industrial Strategy Annual Accounts and Reports 2019-20 published the estimated losses for each loan
BBB aim is to work with delivery partners and not to compete with them, which relies on trust and good working relationships with its existing and any prospective delivery partners. The wrongful release of commercial information about a delivery partner is likely to impact these relations and the ability for the BBB to work with such partners to help unlock finance for businesses across the
Finally, the financial services industry is an important part of the UK economy and there is a strong public interest in ensuring the financial sector can operate effectively. Lenders have established processes to monitor, report and investigate concerns without the need for specific details to be disclosed to the

On review of the factors above, we believe the public interest test favours maintaining the exemption, hence the decision not to release the information held related to the lender accreditation process, the post-accreditation audit, or the fraud prevention forum, in the view it would prejudice the commercial interests of the above parties.

Section 31 – Prejudice to law enforcement

Prejudice the apprehension of offenders and/or;
Make the schemes more susceptible to fraud if it is perceived that fraud is either unlikely to be detected or

The likelihood of this prejudice is considered high. Fraud is a significant crime, costing the UK economy approximately £190 billion a year, and it was identified that the Bounce Back Loan Scheme was at high risk of fraud. As mentioned previously, the public interest is high because of the substantial amounts being loaned under the Scheme. Details of the Scheme, its take-up and implementation, have been published in particular in the HM Treasury statistics, National Audit Office Investigation Report, Public Accounts Committee as well as other Committee Meetings involving Government officials, but the release of the documents that set out the specific concerns from lenders may facilitate the commission of an offence, for example being able to commit fraud. Therefore, we take the view that the balance of interest lies in withholding the information.

For reference the information publicly available includes:

HM Treasury published figures for the number of loan applications and their total value: https://www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan- scheme-statistics
BBB published its Reservation Notices of BBB’s concerns in relation to the BBLS and Future Fund Schemes: https://british-business-bank.co.uk/british-business-bank-publishes- reservation-notice-and-ministerial-direction-for-the-bounce-back-loan-scheme/ and https://www.british-business-bank.co.uk/reservation-notice-for-the-future-fund/
Department for Business, Energy and Industrial Strategy (BEIS) published its Annual Report and Accounts, which includes loss estimates for all of the Covid-19 Loan Schemes: https://www.gov.uk/government/publications/beis-annual-report-and-accounts-2019-to-2020
National Audit Office published its Investigation into the Bounce Back Loan Scheme: https://www.nao.org.uk/report/bounce-back-loan-scheme/
Public Accounts Committee on November 5th 2020 about the Bounce Back Loan Scheme involving HM Treasury, Department for Business, Energy and Industry Strategy (BEIS) and BBB to discussed the Bounce Back Loan Scheme, which discussed the risks: https://committees.parliament.uk/event/2526/formal-meeting-oral-evidence-session/.
National Crime Agency highlighting the risk and cost of fraud: https://nationalcrimeagency.gov.uk/what-we-do/crime-threats/fraud-and-economic-crime

If you have any queries about the handling of your request, please let us know.

Your right to an Internal Review under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

Yours sincerely,

British Business Bank FoI Officer

Reference FOI 20-095-1

08 December 2020

Dear

RE: Freedom of Information Request

Thank you for your freedom of information request received by the British Business Bank (BBB) on 21 October 2020, where you requested:

“The monthly fraud reports compiled by the lenders engaged in the BBLS (as well as the other loan schemes if applicable – The CBILS, CLBILS and Future Fund).”

Response:

Under the Freedom of Information Act 2000 (‘FOIA’), you have the right to:

know whether we hold the information you require, and
be provided with that information (subject to any exemptions under the Act which may apply).

We wrote to you on the 18 November 2020 to confirm we were extending the deadline to consider the public interest test, which we have now completed.

We can confirm the monthly reports we hold are for the Bounce Back Loan Scheme (BBLS); we do not hold such reports for CBILS, CLBILS or Future Fund. BBLS Lenders are providing us with monthly fraud information and the information received has been the number of prevented loss cases.

The aggregated view across all BBLS lenders, as of 20th October 2020:

prevented fraud cases: number of loans 26,933
prevented fraud: value: £1,107,329,960

BBB provided the aggregated figures in a letter to the Public Accounts Committee, which explained the monthly fraud reports were in development and the methodology remained subject to refinement. For reference: https://committees.parliament.uk/work/622/covid19-the-bounce-back-loan- scheme/publications/3/correspondence/.

We do hold the individual reports made by the BBLS Lenders, but after careful consideration we consider them to be exempt from disclosure under FOIA sections 41 and 43 because they were provided in confidence by the Lenders and their release would be likely to prejudice the commercial interests of the Lenders and BBB.

When we apply an exemption, we are required to explain what the exemption is and why it applies.

Section 41 – Information provided in confidence

Section 41 states that information is exempt from disclosure if it was (a) obtained from any other person, and (b) the disclosure of the information to the public by the public authority holding it would constitute a breach of confidence actionable by that or any other person.

The monthly fraud reports were provided to BBB by the Lenders and we believe the disclosure of the individual submissions would constitute a breach of confidence. When considering if a breach is actionable, the Information Commissioner recommends considering these three points:

Whether the information has the quality of confidence. The information provided by the lenders is the number of prevented fraud cases for the BBLS applications they have handled. The total number of these cases, across all lenders, has been published, but the cases per lender has not. The individual submissions are specific to the lender and contain sensitive information, which is not trivial in nature nor accessible to the public, and therefore have the quality of
Whether the information was imparted in circumstances importing an obligation of confidence. Accredited lenders sign a Guarantee Agreement with the BBB, which was developed to provide the legal framework and contractual terms and conditions of the BBLS. The Agreement confirms BBB’s obligations under the FOIA and we take into account the law when handling requests for information that has been provided by lenders; however, lenders have the reasonable expectation that commercial or business sensitive information will remain confidential as per the Guarantee
Whether the disclosure would be an unauthorised use of the information to the detriment of the confider. The disclosure of the individual submissions is likely to result in comparison between the lenders and speculation about the perceived fraud prevention controls and their effectiveness. The BBB letter to the Public Accounts Committee confirms the monthly fraud reporting is in development and the methodology subject to further refinement, so the information is not necessarily comparable and such speculation is likely to be to the detriment of the lenders, in terms of reputation and other commercial

There is a public interest in preserving the duty of confidentiality, so the public interest must be high when deciding whether to release information that would constitute a breach of confidence. In this case, the Bounce Back Loan Scheme has high public interest because of the substantial sums of money involved, the use of public money to pay the first twelve-months of interest, and the estimated credit, error and fraud losses. However, the public interest in the Bounce Back Loan Scheme is to some extent being satisfied given the scrutiny of the National Audit Office Investigation and the Public Accounts Committee, which focused on the potential losses and fraud concerns. We have also considered whether it is in the public interest if the relationships between BBB and lenders are impacted as the result of potential or actual legal action at a time when all the key stakeholders are working to prevent fraud. We therefore take the view that the public interest currently lies in maintaining the duty of confidentiality and not to release the individual lender fraud report submissions.

For reference, the Information Commissioner has published guidance to the use of Section 41: https://ico.org.uk/media/for-organisations/documents/1432163/information-provided-in-confidence- section-41.pdf.

Section 43 – Prejudice to commercial interests

Section 43(2) provides information is exempt if its disclosure would, or would be likely to, prejudice the commercial interests of a person; a person can be an individual or any legal entity.

In this case, we believe the disclosure of the individual lender fraud reports would be likely to prejudice the commercial interests of:

The Lenders: As mentioned previously, the disclosure of the individual submissions is likely to result in comparison between the lenders and speculation about the perceived fraud prevention controls and their effectiveness. The BBB letter to the Public Accounts Committee confirms the monthly fraud reporting is in development and the methodology subject to further refinement, so the information is not necessarily comparable and such speculation is likely to prejudice the commercial interests of the lenders, in terms of reputation and the potential loss of business opportunities.

BBB: BBB is working with lenders and other key stakeholders to help prevent fraud and minimise any losses from the Bounce Back Loan Scheme. This involves developing trusted working relationships to ensure parties are engaged and share information to understand the risks and actions needed. The release of information that may prejudice the commercial interests of a lender can also prejudice the commercial interests of BBB. BBB is the UK Government’s economic development bank, established to help finance markets work better for small businesses across the UK. To achieve its objectives, BBB works with partners operating within the SME finance market, such as Banks, Responsible Finance Providers, Leasing Companies, Venture Capital Funds, Invoice Finance Providers, Asset Finance Providers and Web-Based Financial Platforms, so the misuse or wrongful disclosure of information can have a significant impact on the relations it has within the finance market.

Likelihood of prejudice

Relying on Section 43(2) requires us to consider the likelihood of the prejudice and whether it ‘would’ or ‘would be likely to occur’. We believe the prejudice ‘would be likely to occur’ on the basis that the Loan Scheme has significant interest such that the lenders’ submissions would be widely published and commented and speculated upon.

Public Interest Test

The public interest factors in favour of disclosing the information:

There is always a general public interest in transparency and how Government and public authorities operate, make decisions and spend money, and the purpose of the Freedom of Information Act is to enable the public to ask questions, be informed and engage with decisions and affairs that affect the public and society as a
There is public interest in the Loan Schemes because of the number of loans awarded and the sums involved. Although it is the Lenders’ money being loaned, the Government has agreed to pay the first 12 months of interest payments and cover 80% or 100% of loans in the event the Recipient defaults (depending on the guarantee scheme). In the case of the Future Fund, the Government loan is made on entry by the company into a convertible loan agreement. The loan converts into shares in the company in certain circumstances (including a new funding round or an exit) or otherwise mature after 36 months. In consequence, the loans involve public money. For reference, the latest figures are here: https://www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan- scheme-statistics).
There is a public interest in protecting public money and preventing and combating financial crime including The speed of the introduction of the Loan Schemes, the number and value of the loans has given rise to concerns about the risk of fraudulent applications.

The public interest factors in maintaining the exemption:

There is a public interest is preventing any prejudice-based detriment. We have concerns that the release of the individual submissions would harm the lenders and potentially make them less willing to engage with the fraud prevention work that is
There is a public interest in tackling fraud and financial crime and information has already been published, via the National Audit Office Investigation and the Public Affairs Committee, and further information is likely to be published in the future, for example the Department for Business, Energy and Industrial Strategy Annual Accounts and Reports published the estimated losses in
Finally, the financial services industry is an important part of the UK economy and there is a strong public interest in ensuring the financial sector can operate effectively. Lenders have established processes to monitor, report and investigate concerns without the need for specific details to be disclosed to the

On review of the factors above, we believe the public interest test favours maintaining the exemption and therefore not to release the individual monthly reports. This decision is based on the premise that the disclosure of the individual submissions would be likely to prejudice the commercial interests of the Lenders and BBB.

If you have any queries about this request, please let me know.

Your right to an Internal Review under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

Yours sincerely,

British Business Bank FoI Officer

Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF or see their website for alternative contact details: www.ico.org.uk.

Yours sincerely,

British Business Bank FoI Officer

Reference FOI 20-97-1

19 November 2020

Dear

RE: Freedom of Information Request

Thank you for your freedom of information request received by the British Business Bank (BBB) on 22nd October 2020, where you requested the following information:

“The scheme agreement between the British Business Bank and lenders for the COVID loan schemes (BBLS, CBILS, CLBILS, Future Fund)

The guarantee agreement between government and lenders for the Covid Loan Schemes. It is this agreement that sets out the minimum fraud standards expected of the lenders.

There is a very strong public interest in transparency and accountability, in good decision-making by public bodies, in upholding standards of integrity, in ensuring justice and fair treatment for all, in securing the best use of public resources, in informing the public about money spent on their behalf and enabling scrutiny of public spending.

Given the predicted cost to the taxpayer from the Covid Loan schemes in terms of credit and fraud losses, it is imperative the public is able to fully scrutinise the schemes, and the release of this information would substantially aid those efforts.”

Response:

Under the Freedom of Information Act 2000 (‘FOIA’), you have the right to:

know whether we hold the information you require, and
be provided with that information or an explanation to what exemption(s) apply

We can confirm that the British Business Bank holds some information within the scope of your request.

The Future Fund scheme does not involve other lenders. The Future Fund is comprised of government investment and private investment which provides convertible loans to UK companies. More information on the Future Fund is available here:-

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan- schemes/future-fund/investor-information/

The Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS) all provide loans via accredited lenders.

A copy of the redacted guarantee agreements for each of the three schemes is attached. Please note, there is no separate agreement in place between the government and lenders, the agreements attached are between the British Business Bank, acting on behalf of the Department for Business, Energy and Industrial Strategy (BEIS) and accredited scheme lenders.

We are withholding the redacted information in the attached documents as we consider that the disclosure of this information would be likely to prejudice commercial interests and that the exemption in section 43(2) of the Act therefore applies. Relevant commercial interests include those of i) The British Business Bank; ii) The Covid-19 Loan Schemes accredited lenders and iii) The Department for Business, Energy and Industrial Strategy.

We recognise that there is a general public interest in the disclosure of information, as greater transparency makes Government more accountable. Against this there is a public interest in ensuring that the commercial interests referred to above are not damaged or undermined by disclosure of information which is not common knowledge, and which could adversely impact these commercial interests. A disclosure of information under the Act releases that information into the public domain and so is in effect, released to the public at large.

If you have any queries about this request, please let me know.

Your right to an Internal Review under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

Yours sincerely,

British Business Bank FoI Officer

Guarantee Agreement

between

The Secretary of State for Business, Energy and Industrial Strategy

as Guarantor

and

[·]

as Lender

relating to

The Bounce Back Loan Scheme

Definitions, interpretation and effective date of this Agreement…………….. 1
Guarantee………………………………………………………………………………………. 2
Offer of a Scheme Facility………………………………………………………………… 3
Terms of the Scheme Facilities and rights of the Lender……………………… 5

Business Interruption Payment (“BIP”) 12
Reporting, monitoring, audit and maintenance of records…………………… 14
Representations and warranties………………………………………………………. 16
General undertakings…………………………………………………………………….. 18

Survival of rights 26

Service Level Agreement……………………………………………………………….. 27
Data protection……………………………………………………………………………… 27
Confidentiality……………………………………………………………………………….. 28
Notices…………………………………………………………………………………………. 31
BBB Reporting Systems rights………………………………………………………… 31
Relationship between the Parties…………………………………………………….. 31
Remedies and waivers…………………………………………………………………… 31
Invalidity and severability………………………………………………………………… 32
Further assurances………………………………………………………………………… 32
Amendments and waivers………………………………………………………………. 32
Assignment and transfer…………………………………………………………………. 32
Transitional provisions……………………………………………………………………. 33
Counterparts…………………………………………………………………………………. 34
Contracts (Rights of Third Parties) Act 1999…………………………………….. 34
Governing law and jurisdiction………………………………………………………… 34
Service of process…………………………………………………………………………. 34

Schedule 1 : Definitions and Interpretation………………………………………………….. 36

Schedule 2 : Eligibility Criteria……………………………………………………………………. 50

Schedule 3 : Standard Question Set and Declarations…………………………………. 53

Schedule 4 : Reporting Data……………………………………………………………………… 60

Schedule 7: Scheme Guidance………………………………………………………………………………………………………………. 66

Schedule 10 : Scheme Facility Letter Requirements…………………………………….. 70

THIS AGREEMENT (the “Agreement”) is dated and made

BETWEEN:

THE SECRETARY OF STATE FOR BUSINESS, ENERGY AND INDUSTRIAL STRATEGY, (the “Guarantor”); and

[], (the “Lender”), registered in [·] as company number [·] and having its registered office at [·],

(each, a “Party” and together, the “Parties”)

BACKGROUND:

The Guarantor and the Lender have entered into this Agreement for the purpose of the Guarantor providing guarantees to the Lender in order to cover the credit risk of the Lender relating to Scheme Facilities (each guarantee in respect of a Scheme Facility, a “Scheme Guarantee”).

Subject to the terms of this Agreement, the Lender can make available such Scheme Facilities as it in its sole discretion

1. Definitions, interpretation and effective date of this Agreement

Definitions

Unless otherwise defined herein, all capitalised terms have the meanings given to them in Part 1 (Definitions) of Schedule 1 (Definitions and interpretation).

1.2 Interpretation

This Agreement will be construed in accordance with Part 2 (Interpretation) of Schedule 1 (Definitions and interpretation).

1.3 Effective Date of this Agreement

This Agreement comes into effect on the date stated above (the “Effective Date”).

1.4 Precedence of this Agreement and the Scheme Guidance

Subject to Clause 1.2 (Interpretation), in the event of any inconsistency between the terms of the Scheme Guidance and this Agreement, this Agreement takes precedence.

The Lender agrees, to provide to the Applicant under the Proposed Scheme Facility or the Borrower under a Scheme Facility (as applicable) a written statement setting out the aggregate amount of it BIP and the Scheme Facility (the “State aid Amount”). This may be incorporated into the Standard Scheme Application Process, the Scheme Facility Letter or provided as a separate statement which may be provided after the Initial Drawdown Date of the Scheme Facility, at the discretion of the

If the Scheme Facility is granted under de minimis State aid rules, the statement must state the State aid amount and the following language:

“The value of the de minimis aid arising from this facility is £[•] [insert State aid amount].

Provision of such State aid is governed by regulations made by the European Commission, Under these rules the maximum de minimis State aid any undertaking may receive over any rolling three-year period is generally €200,000, although lower ceilings apply in certain sectors as detailed below.

It is your responsibility to retain records of any de minimis State aid arising from assistance received for a minimum of ten years from the date of receipt and to ensure that you do not exceed the rolling three-year limit. If you make any other application to a support scheme which is deemed to provide de minimis State aid during the next three years you will be required to inform the operator of that scheme about the de minimis State aid advised by this letter and any other applicable aid from other sources.”

*Sector*	*Maximum Permissible Aid (€)*	*Relevant Regulation*	*Regulation Date*
Primary production of agricultural products	20,000	1408/2013	18/12/13
Fishery and aquaculture	30,000	717/2014	27/6/14
Road Freight Transport	100,000	1407/2013	18/12/13
All Other Eligible Sectors	200,000	1407/2013	18/12/13

If the Scheme Facility is granted under the European Commission’s Temporary Framework, the statement must state the State aid amount and the following language:

“The value of the aid arising from this facility is £[•] [insert State aid amount].

Following the outbreak of the Coronavirus, the European Commission has approved schemes to aid businesses affected by the Coronavirus outbreak on the basis of their Temporary Framework, including the Covid-19 Temporary Framework measure for the UK.

The maximum level of aid that a company may receive is €800,000 (€120,000 per undertaking active in the fishery and aquaculture sector or €100,000 per undertaking active in the primary production of agricultural products). This is across all UK measures under the terms of the European Commission’s Temporary Framework.

13 L_LIVE_EMEA1:47024003v1

of their advisers, agents or contractors) (the “Guarantor Related Parties”) has the right to carry out audits and controls and to request information about this Agreement and the Scheme Facilities. The Lender will permit monitoring visits and inspections of its business operations, books and records relating to this Agreement and the Scheme Facilities by any Guarantor Related Party, provided that it receives at least five Business Days’ notice of such visit or inspection. For these purposes, the Lender will permit access to its premises to each Guarantor Related Party during normal business hours.

The Lender will, and will procure that its officers, employees and agents will, give the Guarantor Related Parties all such reasonable assistance (including, but not limited to, investigating (where appropriate) and responding to any enquiries raised by the Guarantor Related Party in connection with an audit/monitoring) and disclose to the Guarantor Related Parties such documents, records and information maintained by the Lender about the Borrowers and/or the Scheme Facilities which are relevant to the audit/control as needed by the Guarantor Related Parties to enable them to complete an audit to their satisfaction (except where the Lender is prohibited from such disclosure by law (including by a court order)).

The Lender will supply to the Guarantor Related Parties such information, documents, reports and records about the Scheme Guarantees and/or Scheme Facilities as the Guarantor Related Parties may from time to time require and investigate (where appropriate) and respond to any enquires made by the Guarantor Related Parties about the same (except where the Lender is prohibited from such disclosure by law (including by a court order)).

At such frequency as the Guarantor Related Parties may reasonably determine, the Lender agrees to ensure that one or more of its officers or employees (in each case holding a senior position in the Lender) is available to meet with a representative of the Guarantor Related Parties, each such meeting to be:

held at a location and at a date and time agreed as being mutually convenient to both the Lender and the Guarantor Related Party; and

used as a forum for discussing any relevant matters relating to the operation of this Agreement including, but not limited to, any operational difficulties or issues arising and needing to be

12.3 Regular reporting

In addition to any information required by Clause 12.2(D), the Lender undertakes:

to report through the BBB Reporting Systems, the information set out in Schedule 4 (Reporting Data) in respect of each Scheme Facility by the end of the Business Day following (i) the offer a Proposed Scheme Facility to the relevant Applicant, (ii) the Initial Drawdown Date of the Scheme Facility,

(iv) the date on which the Lender becomes aware of any change in such information; and

15 L_LIVE_EMEA1:47024003v1

13.2 Binding obligations

The obligations expressed to be assumed by it in this Agreement are legal, valid, binding and enforceable obligations, in accordance with their terms.

13.3 Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, this Agreement do not, and will not, conflict with:

any law or regulation (including any of its licenses or permits issued by any of the regulatory authorities of its places of business relevant to this Agreement and jurisdiction of incorporation), or judicial or official order, applicable to it;

its constitutional documents; or

any agreement or instrument binding upon it or any of its assets or constitute a default or termination event (however described) under any such agreement or instrument,

where, in the case of sub-Clauses 13.3(A)-(C) above, the same would affect its ability to perform its obligations under this Agreement.

13.4 Power and authority

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, this Agreement and the transactions contemplated by this Agreement.

13.5 Authorisations and regulatory standards

All authorisations required to:

enable it lawfully to enter into, exercise its rights and comply with its obligations in this Agreement; and

make this Agreement admissible in evidence in its jurisdiction of incorporation, have been obtained or effected and are in full force and

All authorisations necessary for the conduct of the business of the Lender, including lending activities, have been obtained or effected and are in full force and

13.6 No default

No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or to which its assets are subject which, in either case, might have a Material Adverse

13.7 No misleading information

All information (including any factual information) provided by it for the purposes of or pursuant to this Agreement (including any information provided before the

Effective Date) was true and accurate as at the date it was provided or as at the date (if any) at which it is stated.

Nothing has occurred or been omitted from the information referred to in paragraph 17 above and no information has been given or knowingly withheld that results in that information being untrue or

13.8 Governing law and enforcement

The choice of English law as the governing law of this Agreement will be recognised and enforced in its jurisdiction of incorporation or, as the case may be, of establishment.

Any judgment given by the courts of England in relation to this Agreement will be recognised and enforced in its jurisdiction of incorporation or, as the case may be, of

13.9 Good faith

It has entered into this Agreement in good faith.

13.10 Compliance with Eligibility Criteria

Each Scheme Facility complied with the Eligibility Criteria as at the Offer Date of such Scheme Facility.

13.11 Proceedings

No litigation, arbitration or administrative proceedings or investigations of or before any court, arbitral body or Agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have, to its knowledge, been started or threatened against it.

14. General undertakings

Scheme Guidance

The Lender agrees to take account of all sections of the Scheme Guidance in complying with its obligations hereunder.

14.2 Probationary Lender

If the Lender is designated as a Probationary Lender, the Lender covenants and undertakes to comply with the terms of the Probationary Lender Side Letter throughout the Probationary Period. To the extent that there is any inconsistency between the Probationary Lender Side Letter and this Agreement, the Probationary Lender Side Letter prevails.

14.3 Visibility and promotion

The Lender will comply with the Visibility and Promotion Guidelines at all times during the term of this

The Lender will use reasonable endeavours to ensure that appropriate and adequate information and training regarding the availability and the operation of the Scheme will be communicated and provided to those offices and branches in the United Kingdom which the Lender has designated as being involved or responsible for the

implementation of the Scheme and those of its employees and officers who, on a day to day basis, are the principal points of contact with potential Applicants with a view to ensuring that:

there is sufficient awareness of the availability and operation of the Scheme in those employees and officers; and

the Scheme is available on a consistent geographical basis, taking into account the extent of the Lender’s operations, throughout the United

The Lender (and its officers and employees) will not represent in any way that the provision by the Guarantor of a Scheme Guarantee implies any endorsement or warranty of the Lender from the Guarantor or the Government of the United Kingdom and will ensure that any material utilised by it in respect of the Scheme includes a clear provision to that

14.4 Other Government Schemes

The Lender may not fund any Scheme Facility using:

grant or grant-equivalent monies made available directly or indirectly to it by the UK Government or any other state, supranational or public body; or

any monies provided by, or pursuant to a scheme or facility which is administered by, the British Business Bank plc or any of its Affiliates,

in the case of Clause 14.4(B), without the consent of the Guarantor (such consent to be provided in its sole and absolute discretion).

14.5 State aid

If the Lender becomes aware that any State aid requirements have not been complied with in respect of the Scheme or any Scheme Facility, the Lender will promptly notify the

If, in the opinion of the Guarantor, any State aid requirements have not been complied with in respect of the Scheme, the Lender agrees to take any remedial action required by the Guarantor in relation to the

14.6 Use of brokers and intermediaries

If the Lender is introduced to any Applicant by a broker or other third party intermediary with whom the relevant Lender has an agreement for the introduction of Applicants in respect of the Scheme (each a “Third Party Intermediary”):

(D) The Lender must not require the Borrower to pay any Lender-levied fees of any description (including on default) or any default interest (except that the Lender may continue to charge interest at 2.5% per annum if the Scheme Facility is not repaid when due until such time as it is repaid).

14.11 Disclosure to Applicants and Borrowers

The Lender agrees to pay due regard to the Borrower’s information needs (which will not be assessed by the Lender at the time of origination of a Scheme Facility) and provide information to the Borrower in a way which is clear, fair and not misleading.

The Lender agrees to provide each Applicant with the following minimum information in relation to their Proposed Scheme Facility clearly and prominently before the time such Proposed Scheme Facility is binding on the Applicant:

the principal amount of the Proposed Scheme Facility;

the interest rate of the Proposed Scheme Facility;

the size and due date of each capital and/or capital and interest repayment instalment in respect of such Proposed Scheme Facility; and

information on the Applicant’s right to repay the Proposed Scheme Facility early;

brief information on the Lender’s complaints handling procedure and the right of the Borrower to escalate to the Financial Ombudsman Service, in accordance with any guidance issued by the Financial Ombudsman Service in respect of the Scheme;

the risks of non-repayment of the Scheme Facility, including the impact on the Borrower’s credit file; and

clear and prominent information on the key terms of the Scheme Facility shown in the Scheme Facility

The Lender agrees to provide each Borrower with the following minimum information in relation to their Scheme Facility during the term of such Scheme Facility:

Timely, clear and adequate information that enables a Borrower to understand that, where the Borrower fails to make payments under the Scheme Facility, the amount missed, what can be done to remedy, in what timescales, and the impact (if any) on future repayments;

upon default by the Borrower, information about any proposed action to the Lender taking action in respect of the Scheme Facility, prior to the Lender taking such action;

regular information about the Scheme Facility (on at least an annual basis) in the form of a statement setting out details of the payment transactions on the Scheme Facility during the period since such information was provided (or the

21 L_LIVE_EMEA1:47024003v1

to take up references about the relevant Applicant and that Applicant’s business;

to give information relating to the relevant Applicant and that Applicant’s business to any other Guarantor Related party or to any other official involved in running or monitoring the Scheme; and

(in the case of a Borrower) in order to evaluate the effectiveness of the Scheme; and

(C) that any Guarantor Related Party may store any Personal Data relating to a Borrower for a minimum of ten (10) years after the Initial Drawdown Date of the relevant Scheme Facility.

The Lender undertakes to assist the Guarantor Related Parties in obtaining information from each Applicant and each Applicant’s consent to the use of its Personal Data in the manner contemplated by this Clause 20, by requiring the Applicant to provide a Data Protection and Disclosure Declaration prior to as part of the Standard Scheme Application Process providing such information to any Guarantor Related

The Lender undertakes to obtain all rights and consents (including in relation to the Guarantor and Guarantor Related Parties’ processing of Personal Data) necessary to ensure that the Guarantor is able to fully exercise its audit rights under Clause 12.2 (Monitoring and audit).

The Parties acknowledge that both the Lender and the Guarantor are acting as Data Controllers in respect of the Personal Data that they process in connection with the

21. Confidentiality

Each Party will, and will use all reasonable endeavours to ensure that any of its agents or sub-contractors will, keep confidential all Confidential Information supplied to it in accordance with this

Notwithstanding this, each Party is entitled to disclose Confidential Information:

where required under any applicable law or contemplated by the terms of this Agreement (including, without limitation, the visibility and promotion, reporting and monitoring obligations to be complied with by the Lender);

where requested or required by any securities exchange, court of competent jurisdiction or any competent judicial, regulatory, governmental or supervisory body or administrative order to which either Party is subject, wherever situated, whether or not the requirement for information has the force of law including, for the avoidance of doubt, disclosure by the Guarantor to Parliament to discharge his duty to report about the operation of the

to each of the Party’s officers, directors, employees, Affiliates (if any) and professional advisers to the extent necessary for the purposes of this Agreement and to its auditors;

to any person to whom a Party is proposing to assign or transfer any of its rights or obligations under this Agreement pursuant to Clause 29 (Assignment and transfer);

where the information is already in the public domain through no fault of such Party;

with the prior written consent of the other Party or (if such information relates to an Applicant) such Applicant (whether pursuant to the Data Protection and Disclosure Declaration or otherwise), in the case of the Lender, not to be unreasonably withheld;

for so long as the Secretary of State for Business, Energy and Industrial Strategy is acting as Guarantor, to the British Business Bank plc or any of its Affiliates and their advisers, the Guarantor Related Parties and their advisers;

the Guarantor Related Parties and their advisers; and

with respect to disclosure by the Guarantor:

to the UK Parliament (including any Committee of the House of Commons or the House of Lords) or to the European Commission;

to any minister of the Crown, any UK government department, Agency or authority, the Bank of England (including, without limitation, the Prudential Regulation Authority), the Financial Conduct Authority, the Financial Policy Committee or any other governmental, banking, taxation or regulatory agency or authority; and

for the purpose of reporting on the establishment, performance or operation of, or compliance with, this

If the Guarantor is requested to disclose any Confidential Information pursuant to the provisions of the FOI Act (an “FOI Request”) or the EIR (an “EIR Request”), the Guarantor will (to the extent practicable and permissible under the FOI Act or EIR and consistent with the Code of Practice of the Department for Constitutional Affairs on discharge of public authorities’ functions under Part 1 of the FOI Act or the Code of Practice of the Department for Constitutional Affairs on discharge of public authorities’ functions under the EIR):

notify the Lender in writing of the nature and content of such FOI Request or EIR Request as soon as practicable; and

before making a disclosure pursuant to an FOI Request or EIR Request, for a period of no longer than five (5) Business Days (or if the Guarantor considers there to be exceptional circumstances, such shorter period as the Guarantor considers reasonably practicable) consult with the Lender as to:

whether such FOI Request or EIR Request is valid;

whether or not disclosure pursuant to the FOI Act or EIR is required; and

(if the Guarantor determines that disclosure pursuant to the FOI Act or EIR is required) the scope and content of any proposed disclosure,

and, as part of such consultation process, the Guarantor will take into account any representation from the Lender as to whether the Confidential Information is commercially sensitive or falls within one or more of the exemptions set out in Part II of the FOI Act and any other representations from the Lender about whether or not there is an obligation to disclose such Confidential Information and/or the extent of any such required disclosure;

(if the Guarantor determines that disclosure of any Confidential Information pursuant to the FOI Act or EIR is required and the Lender has objected to such disclosure or

the extent of the proposed disclosure) give the Lender as much prior notice as is reasonably practicable before such disclosure being made; and

subject to the above, the Guarantor may determine in its absolute discretion whether and to what extent disclosure of any Confidential Information pursuant to the FOI Act or EIR is

Nothing in this Clause 21 restricts or prevents the publication by the Guarantor of any information (whether Confidential Information or otherwise):

in accordance with any publication scheme (as defined in the FOI Act or EIR) adopted and maintained by the Guarantor in accordance with the FOI Act or EIR; or

in accordance with any model publication scheme (as defined in the FOI Act or EIR) applicable to the Guarantor as may be published from time to time by the Information Commissioner.

In deciding whether to publish information (whether Confidential Information or otherwise) in accordance with any publication scheme or model publication scheme in accordance with the preceding paragraph, the Guarantor will have due regard to whether, in its sole opinion, such information would be exempt from disclosure under the FOI Act or EIR.

As soon as reasonably practicable following a request from an Applicant or a Borrower, the Lender will make available to such Applicant or Borrower (as applicable) all information relating to it that has been provided by the Lender to a Guarantor Related Party and/or any Scheme Facility entered into by it, other than where such disclosure is prohibited by applicable law or

This Clause 21 supersedes any previous confidentiality undertaking given by either Party before the Effective

Notwithstanding any other term of this Agreement, no Party is required to disclose any information to the other Party (or any other entity) if to do so would breach applicable law or regulation.

22. Notices

All notices, requests, demands or other communications required to be given to or served upon the Parties under the provisions of a Scheme Document will be given in writing and, unless otherwise stated, may be made by email or Notices will be deemed to be duly given (i) when delivered (if given by email or personal delivery) or (ii) three Business Days after posting (if given by first class letter post) and will be addressed as follows:

if to the Guarantor:

c/o Managing Director Guarantee and Wholesale Solutions The British Business Bank

Steel City House West Street Sheffield

S1 2GQ

Email: info@british-business-bank.co.uk; and

if to the Lender:

[·]

Email: [·]

For the attention of: [·],

or at such other address and/or to such other person as the relevant addressee may specify by at least 5 Business Days’ notice.

23. BBB Reporting Systems rights

The Guarantor and the Lender agree that all rights in data, text, databases, records and logs, graphics and images which are embodied in any electronic or tangible medium comprised in or generated via the BBB Reporting Systems (but not, for the avoidance of doubt, generated by the Lender itself) pursuant to this Agreement are assigned to and vest in the Guarantor absolutely.

24. Relationship between the Parties

Save as may be expressly agreed between them from time to time, neither the Lender nor the Guarantor will, as a result of the participation of either in the Scheme, (i) be (or have authority to act as) agent for the other or (ii) be (or be treated as being) in a fiduciary relationship to the other.

25. Remedies and waivers

No failure to exercise, nor any delay in exercising, on the part of either Party any right or remedy under this Agreement will operate as a waiver thereof nor will any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

26. Invalidity and severability

If any provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, it will not affect the legality, validity or enforceability:

in that jurisdiction of any other provision of this Agreement; or

in any other jurisdiction of that or any other provision of this

27. Further assurances

The Lender will promptly do all further acts and things within its control, and execute and deliver such further documents as the Guarantor may reasonably require (and in such form satisfactory to the Guarantor), as are, in the opinion of the Guarantor, desirable:

to implement and/or required to give full effect to this Agreement and any Scheme Guarantee contemplated by this Agreement;

30. Transitional provisions

Reporting

Clause 12.3 (Regular reporting) shall not come into effect until the Lender is given reasonable notice by the Guarantor that the appropriate BBB Reporting System for this data is available.

30.2 Legislative changes

If, but for this Clause 30.2:

the representation and warranty given by the Lender under Clause 13.3(A) (Non- conflict with other obligations) would be inaccurate when given; or

a Scheme Facility would not comply with the Eligibility Criterion set out in paragraph 2(E) of Schedule 2 (Eligibility Criteria),

and such breach, inaccuracy or non-compliance:

results from a determination under Section 140A of the Consumer Credit Act 1974 that the relationship between the Lender and the Borrower is unfair (such determination, a “S140A Event”); or

results from non-compliance by the Lender or the Scheme Facility with any regulation, to the extent that such regulation has been expressly disapplied or waived by the FCA or any other applicable regulator or to the extent that such regulator has granted forbearance, in connection with the Scheme,

then to the extent that such breach, inaccuracy or non-compliance results from (1) or (2) above, it shall be ignored for the purposes of determining the compliance of the Lender and the Scheme Facility with the matters set out in (A), (B) and (C) above.

31. Counterparts

This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

32. Contracts (Rights of Third Parties) Act 1999

A person who is not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 (the “Act”) to enforce any term of this Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from under that Act.

33. Governing law and jurisdiction

Governing law

This Agreement, and any non-contractual obligations arising out of or in connection with it, will be governed by, and construed in accordance with, English law.

33.2 Jurisdiction

The parties irrevocably agree that the courts of England are to have exclusive jurisdiction to settle any dispute which may arise out of or in connection with this Agreement and the documents entered into pursuant to it and that accordingly any proceedings arising out of or in connection with this Agreement and such documents will be brought in such courts. The parties irrevocably submit to the jurisdiction of such courts and waive any objection to proceedings in any such court on the ground or venue or on the ground that the proceedings have been brought in an inconvenient forum.

This Clause 33.2 is drafted for the benefit of the Guarantor and will not limit its right to take proceedings in any other court with

34. Service of process

Without prejudice to any other mode of service allowed under any relevant law, the Lender (if applicable):

will notify the Guarantor of its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement within 5 (five) Business Days of the Effective Date; and

agrees that failure by a process agent to notify the Lender will not invalidate the proceedings

SIGNATORIES

Secretary of State for Business, Energy and Industrial Strategy

Signature: ………………………………………… Signature:…………………………………………

Name: ………………………………………… Name: …………………………………………

Authorised signatory Authorised signatory For and on behalf of British Business Financial Services Limited

as agent for the Secretary of State for Business, Energy and Industrial Strategy

The Lender1

Signature: ………………………………………… [Signature: ]2

Name: ………………………………………… [Name: ]

[Authorised Signatory] [Authorised Signatory]

[Director] [Director]

[Company Secretary] [Company Secretary]

[As attorney for the Lender] [As attorney for the Lender]

[Other: …………………………………………] [Other ]

For and on behalf of [·]

[In the presence of:

Signature of witness:…………………………………..

Name of witness:……………………………………….

Address of witness……………………………………………… ]3

1 The authorised signator(y)(ies) of the Lender should specify the capacity in which they are signing by deleting all but the relevant option below.

2 To be deleted if this Agreement is signed by only one signatory on behalf of the Lender.

3 To be deleted if signature of this Agreement by the signatory of the Lender is not witnessed.

(B) any guarantee (including, without limitation, any personal guarantee), indemnity, undertaking, assurance, commitment, letter of comfort and any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by the advance of money, the purchase of assets or services, or otherwise) for the payment of, indemnity against the consequences of default in the payment of, or otherwise be responsible for, any indebtedness of any other person,

but excluding any security over a Principal Private Residence or Primary Personal Vehicle.

“Commission Recommendation” means Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises.

“Confidential Information” means any information relating to the Guarantor, either of the Lender or a Borrower or the Scheme Guarantee provided to a Party by the other Party or any of its Affiliates or advisers, in whatever form, and includes any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

is or becomes public knowledge, other than as a result of any breach by a Party of Clause 21 (Confidentiality);

in relation to information about Lenders and Borrowers only, is not marked as confidential by the relevant Lender at the time of delivery;

in relation to information about Lenders and Borrowers only, is known by the Guarantor before the date the information is disclosed to it by the relevant Lender or any of its Affiliates or advisers; and

in relation to information about Lenders and Borrowers only, is lawfully obtained by the Guarantor, other than from a source which is connected with the relevant Lender and which, in either case, as far as the Guarantor is aware, has not been obtained in violation of, and is not otherwise subject to, any obligation of

“Control” means, in relation to a party:

that is a body corporate, the power of a person to secure:

by means of the holding of shares or the possession of voting power in relation to that or any other body corporate, or

as a result of any powers conferred by the articles of association or other document regulating that or any other body corporate,

that the affairs of such body corporate are conducted in accordance with such person’s wishes; or

in relation to a partnership, the right to a share of more than half the assets, or of more than half the income, of the

“Data Controller” has the meaning given to such term in the Data Protection Act 2018 or, if the context so requires, the meaning given to any equivalent term under Regulation (EU) 2016/679.

“Data Protection and Disclosure Declaration” means, in respect of a Proposed Scheme Facility, a declaration from the relevant Applicant substantially in the form set out in the Standard Scheme Application Process.

38 L_LIVE_EMEA1:47024003v1

“Temporary Framework” means the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak (19.3.20/1863).

“Termination Date” means the date of termination of this Agreement being whichever is the earlier of:

(A) 4 November 2020 or such later date as is determined by the Guarantor and notified to the Lender in accordance with Clause 22 (Notices); and

“Third Party Intermediary” has the meaning given to it in Clause 14.6 (Use of brokers and intermediaries).

“Trading Activity” means any trading or commercial activity that generates turnover (whether or not such activity is carried on with the intention of making a profit).

“Undertaking in Difficulty” means an “undertaking in difficulty” as defined in Article 2(18) of the Commission Regulation (EU) No 651/2014 of 17 June 2014.

“United Kingdom” means England, Scotland, Wales and Northern Ireland.

“Visibility and Promotion Guidelines” means the visibility and promotion guidelines that are set out in the Scheme Guidance from time to time.

PART 2 : INTERPRETATION

General

In this Agreement:-

the headings to Clauses and Schedules are for ease of reference only;

a reference to a “Clause” or a “Schedule” is to a Clause or Schedule in this Agreement;

the term “month” means calendar month;

the term “person” includes any individual, firm, partnership, joint venture, company, corporation, corporation sole, unincorporated body, state, Agency or association or any two or more of the foregoing and will be construed so as to include that person’s assignees, transferees or successors in title;

references to any one gender include references to all other genders;

references in this Agreement to “this Agreement” or any other document will be construed as references to this Agreement or that other document as amended, varied, replaced, novated or supplemented from time to time, as the case may be;

words importing the singular will include the plural and vice versa unless the context otherwise requires;

references to any statute or statutory provision include any statute or statutory provision which amends, extends, consolidates, or replaces the same, or which has been amended, extended, consolidated, re-enacted or replaced, and will include any orders, regulations, instruments or other subordinate legislation made under the relevant statute;

references to “assets” will include revenues and the right to revenues and property and rights of every kind, present, future and contingent and whether tangible or intangible (including uncalled share capital);

the words “other” and “otherwise” will not be construed as the same as any foregoing words where a wider construction is possible;

the words “including” and “in particular” will be construed as being by way of illustration or emphasis only and will not be construed as, nor will they take effect as, limiting the generality of any foregoing words;

references to “quarter” and “quarterly” will be construed, respectively, as being and relating to a period of 3 months;

references to the “Guarantor” will be construed, save as regards the use of such references in Clause 2.1 (Guarantee), so as to include any person to whom the Guarantor has delegated authority to act on his behalf, or any person through whom the obligations and functions of the Guarantor are performed, under or in connection with this Agreement and/or the operation of the Scheme (including, but not limited to, the British Business Bank plc or any of its Affiliates);

its creditors nor in liquidation, or (in Scotland) subject to a debt payment plan, trust deed – whether protected or not – or an undischarged bankrupt.

The relevant Applicant has confirmed to the Lender that it is engaged in Trading Activity in the United Kingdom at the Date of Application, provided that any temporary cessation of business due to Coronavirus (COVID-19) shall be ignored for these purposes.

The relevant Applicant has confirmed to the Lender that if the Applicant or its Group receives or will receive income from sources other than its Trading Activity as at the Date of Application, more than 50% of the income of that Applicant, together with its Group, is at the Date of Application derived from its Trading Activity. This criterion shall not apply if the Applicant is a charity or a further education

The relevant Applicant has confirmed to the Lender that it has been adversely impacted by the Coronavirus (COVID-19).

The relevant Applicant has confirmed to the Lender that it is not currently using or applying for the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bank of England’s COVID Corporate Financing Facility (CCFF), unless the Scheme Facility will refinance the whole of the CBILS, CLBILS or CCFF

The relevant Applicant has confirmed to the Lender that it is either a company or limited liability partnership incorporated or established in the United Kingdom, or is a tax resident in the United

The relevant Applicant has confirmed to the Lender that neither it nor any member of its Group has previously borrowed under the Scheme nor is currently making any other application for the

The relevant Applicant was carrying on its business on 1 March The existence of the business is evidenced by:

its holding of a business current account with the Lender;

where the Applicant is using a personal current account with the Lender for its business and the Applicant’s business was established on or before 5 April 2019, by the provision by the Borrower of a copy of its HM Revenue & Customs 2018-2019 tax return; or

by other checks carried out by the Lender when a business applies for a

2. The Scheme Facility

The relevant Applicant has completed the Standard Scheme Application

The Applicant has confirmed to the Lender that the Proposed Scheme Facility will be used for an Eligible Purpose (which may include the refinancing of an existing Borrowing Facility used for an Eligible Purpose) and to support trading or commercial activity (or, in respect of Applicants that are registered charities or further education colleges, activities) in the United

The Proposed Scheme Facility will be denominated in Sterling or in such other lawful currency of the United Kingdom from time to

51 L_LIVE_EMEA1:47024003v1

SCHEDULE 3 : STANDARD QUESTION SET AND DECLARATIONS

Bounce Back Loan Scheme Application Form

Section 1 – Applicant details

Name of your company, business or association
Company Registration/Registered Charity Number (if applicable)
Business Address
Business Postcode
Contact telephone number
Email address

Section 2 – Information for your Lender

Please select which of these is applicable to your application:

If you are applying for a Bounce Bank Loan from a lender with whom you have a business current account or charity bank account, please supply your account number and sort code

If you are applying for a Bounce Back Loan from a lender with whom you have a personal current account used for your business, and your business was established on or before 5 April 2019, please supply your account number and sort code. The lender will require you to provide a scanned copy of your 2018/19 self-assessment tax return. [Lender to specify how this is to be provided – for example, uploaded with this application form or emailed]. Your lender may also ask for additional information to verify you as a business

If you are applying for a Bounce Bank Loan from a lender with whom you have a personal current account and your business was established between 6 April 2019 and 1 March 2020, you will need to discuss becoming verified as a business customer with your lender in order to qualify for a Bounce Back Loan

If you are applying for a Bounce Back Loan from either a new lender or from a lender with whom you have a financial relationship that is neither a business current account nor a personal current account, or you are an unincorporated association, they may need to ask you some further questions as part of the loan application process

For the relevant bank account selected above, please state:

Name on account
Account number
Sort code

Section 3 – Loan

You can apply for a loan which is up to 25% of your turnover in calendar year 2019, from a minimum of £2,000, up to a maximum of £50,000. If your business was established after 1 January 2019, you should apply the 25% limit to your estimated annual turnover from the date you started your
What is your annual turnover, or if your business was established after 1 January 2019, what is your estimated annual turnover?

For businesses which are part of a broader group, please state your group’s
How much would you like to borrow under the Bounce Back Loan Scheme:

Please confirm that this is equal to or less than 25% of annual turnover for 2019 or your estimated annual turnover. Please note: if you are part of a larger group, this should apply at group

As part of the scheme, the government is offering a Business Interruption Payment which will cover your interest payments for the first year of a Bounce Back Loan. The government will pay the Business Interruption Payment directly to your lender. Please confirm that you are content to agree to this Business Interruption Payment¹.

Section 4 – Questions about your Business

Has your business been adversely impacted by Covid-19? If you answer no to this question, your business is not eligible for a Bounce Back Loan.

Was your business already insolvent or otherwise a business in difficulty² on 31 December 2019?

1 Please note: for the purposes of questions in this form and the State Aid form which ask about amount of State Aid received, you will need to take into account both the value of the loan applied for and the value of the Business Interruption Payment (covering the first year of interest on the loan).

2 As defined by EU Regulation 651/2014, a business is considered in a difficulty if it met any one of the following criteria on 31 December 2019:

Individuals or companies that have entered into collective insolvency proceedings;
Limited companies which have accumulated losses greater than half of their share capital in their last annual accounts (this does not apply to SMEs* less than 3 years old);

I was/we were not a business in difficulty on 31 December 2019 and that if I am/we are successful in this Bounce Back Loan application⁴, that I/we, together with any other business in my/our group /under my/our common control will not have received more than £711,200 in State Aid since 19 March 2019 under the State Aid Temporary Framework⁵ (or £106,680 in the case of fisheries and aquaculture businesses, or £88,900 for agriculture businesses); or
That if I was/we were a business in difficulty on 31 December 2019, that, if I am successful in my Bounce Back Loan application⁶:
1. For businesses involved in fisheries and aquaculture: I/we together with any other business in my/our group/under my/our common control will not have received more than £26,670 in de minimis State Aid
2. For businesses involved in agriculture: I/we together with any other business in my/our group/under my/our common control will not have received more than

£17,780 in de minimis State Aid

For businesses involved in logistics: I/we together with any other business in my/our group/under my/our common control will not have received more than

£88,900 in de minimis State Aid

For all other businesses: I/we together with any other business in my/our group/under my/our common control will not have received more than £177,800 in de minimis State Aid,

in each case during the last three years.

I/We confirm that if I was/we were a business in difficulty on 31 December 2019, the Bounce Back Loan will not (in whole or in part) be used to support export related
I/We confirm that if I/we or any member of my/our group receive income from sources other than my/our trading activity, more than 50% of my/our business’ income, together with that of any member of my/our group, is derived from my/our business’ trading activity⁷.
I/We undertake to use the credit granted on the basis of this agreement only to provide economic benefit to my/our business, for example, providing working capital, or investing in my/our business. I/We also confirm that the Bounce Back Loan will be used wholly for business purposes and not personal
I/We have reviewed and understood the costs associated with repayment of the loan, that is, the principal and interest and repayment of capital during the period beginning from the second year of the loan until its expiry five years later. I/We confirm that I am/we are able and intend to complete timely repayments in future. In addition, I/we understand that the 100% guarantee that is provided by the government under this scheme is to cover any losses made by the lender, and does not cover losses that I/we might suffer if I am/we are unable to meet my payment obligations for which I/we remain fully I/We understand that if I am/we are unable to meet

4 The Bounce Back Loan (including the value of the Business Interruption Payment) constitutes State Aid. The Business Interruption Payment, which covers the interest of 2.5% for year one of the Bounce Back Loan, must be accounted for in this declaration. Please note: If you are active in Fisheries and Aquaculture, Bounce Back Loans are not available for the activities listed in Article 1, Paragraph 1 of European Commission Regulation 717/2014

5 State Aid under the Temporary Framework includes the Business Interruption Payment under CBILS, the Small Business & Retail Hospitality and Leisure Grants Fund, Business Support Grants, the Local Authority Discretionary Grants Fund and the Coronavirus Statutory Sick Pay Rebate Scheme.

6 The Bounce Back Loan (including the value of the Business Interruption Payment) constitutes State Aid. The Business Interruption Payment, which covers the interest of 2.5% for year one of the Bounce Back Loan, must be accounted for in this declaration. Please note: If you are active in Fisheries and Aquaculture, Bounce Back Loans are not available for the activities listed in Article 1, Paragraph 1 of European Commission Regulation 717/2014

7 This does not apply to charities or further education colleges.

my/our payment obligations, this could have a negative impact on my credit score, which may reduce my ability to access further lending in the future.

I/We understand that, while the prohibition of personal guarantees under the Bounce Back Loan Scheme fully protects the personal assets of owners and directors of limited liability companies, if I am/we are a sole trader or partnership my/our personal assets may be at risk, should I/we fail to complete loan repayments as per the loan agreement with the lender. Per the terms of the Bounce Back Loan Scheme, neither the lender nor the government as guarantor will seek to enforce the loan against my/our main home or main

12. I/We understand that this loan, made under the Bounce Back Loan Scheme , is not subject to the usual consumer protections that apply to business lending and as such I/we will not have the benefit of the protection and remedies that would otherwise be available to me/us under the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974.

I/We understand that the lender will not conduct any form of credit or affordability check and accepts no responsibility, whether arising in contract, tort (including negligence) or otherwise, for my/our decision to borrow. I/We also understand that the lender may register its Bounce Back Loan with credit reference agencies, and that my credit rating may be affected by any failure or delay in
I am/We are aware that, if I am/we are in any doubts as to the consequences of the agreement not being regulated by the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974, then I/we should seek independent legal advice. I/We acknowledge that the lender is not responsible for informing me/us about these
I/We make the data protection declaration (annexed below) and, if relevant have provided notice of data processing to relevant
For loan applications being submitted on behalf of limited companies, unincorporated associations, charities, or partnerships: I/We declare that I/we are submitting this form in accordance with my/our company/partnership/charity/unincorporated association signing mandate.
I/We recognise that by providing information that is inaccurate or incomplete in any material particular, I/we may be regarded as attempting to gain, or gaining, a financial advantage dishonestly and as such will be liable to criminal prosecution for fraud under the Fraud Act 2006 (or equivalent law in Scotland) (for which the penalties include imprisonment or a fine or both), as well as to the forfeiture of all loan proceeds together with interest and court
I/We confirm that the information provided in this application is complete and

Section 6 – Borrower’s Signature(s)

Please sign below and submit the form. In signing, I/we confirm that I/we have authority to bind my/our organisation to this agreement, noting that personal liability may exist if I/we apply without such authority.

Name:

Signature:

Position:

Date:

Name:

Signature:

Position:

Date:

Name:

Signature:

Position:

Date:

Annex: Text of data protection declaration

Data protection declaration (referred to above)

I/We, acknowledge in relation to the Bounce Back Loan Scheme application that personal data provided in this application shall be collected by the Lender and the British Business Bank plc, both of whom are data controllers, and used in the following ways:

the Lender’s processing of my personal data shall be carried out in accordance with the Lender’s Privacy Notice: [insert link to lender’s privacy notice]

The British Business Bank’s processing of my personal data shall be carried out in accordance with the British Business Bank Privacy Notice: https://british-business-bank.co.uk/privacy-notice/

Being communicated to each of:

the Secretary of State for Business, Energy and Industrial Strategy its agents and auditors (the “Guarantor”);

the British Business Bank plc, any affiliate of the British Business Bank plc and any of their advisers, agents or contractors including professional advisers and consultants, auditors and advisers carrying out due diligence;

processing agents, fund managers, delivery partners and companies providing services to the British Business Bank and its affiliates;

Government departments and Devolved Administrations (including but not limited to the National Audit Office, Office for National Statistics, HM Treasury and the Department for Business, Energy and Industrial Strategy) and other politicians or government members (i.e. ministers); and,

the Lender’s own group and relevant third parties. (the “Guarantor Relevant Parties”);

being used by the Guarantor and any Guarantor Relevant Parties:

for analytical and administrative purposes;

to contact me in connection with the Bounce Back Loan; and

to evaluate the effectiveness of the Bounce Back Loan Scheme; and

if a scheme facility is made available to me/us by the Lender being retained by the relevant recipient for a minimum of ten (10) years after the initial drawdown date of such scheme

Bounce Back Loans – State Aid Form

Please complete this form only if instructed to do so by the instructions in Section 4 of the main Bounce Back Loan application form. Please return this form with your completed Bounce Back Loan application form.

If your business operates in fisheries or aquaculture⁸, agriculture, or logistics, please go to section 2. If you are in any other sector, please complete section 1 only.

Section 1 – General State Aid Questions

What is the value of the loan you are seeking under the Bounce Back Loan scheme?

Have you or any other company in your group of companies or under common control with your company received any de minimis State Aid before? If so, what is the value? (Note: if you have received de minimis State Aid before, you will have received a letter confirming the value of your de minimis State Aid)

Can you confirm that the combined value of your answers to 1 and 2 is less than £177,800?

Can you confirm that you are not seeking the loan in relation to the establishment and operation of a distribution network or to other current expenditure linked to an export activity?

If you answered yes to Q3 and Q4, please continue to section 5 in the main application form, and please return this form with your main Bounce Back Loans application form. If you answered no to Q3 or Q4, unfortunately you are not eligible for a Bounce Back Loan.

Section 2 – Sector-specific questions

What is the value of the loan you are seeking under the Bounce Back Loan scheme?
Have you or any other company in your group of companies or under common control with your company received any de minimis State Aid before, during the last three years, if so what is the value? (Note: if you have received de minimis State Aid before, you will have received a letter confirming the value of your State Aid).

8 Please note: Bounce Back Loans are not available to businesses active in the activities listed in Article 1, Paragraph 1 of European Commission Regulation 717/2014

For businesses involved in fisheries and aquaculture, is the combined value of 5 and 6 less than

£26,670?

For businesses involved in agriculture, is the combined value of 5 and 6 less than £17,780?

For businesses involved in logistics, is the combined value of 5 and 6 less than £88,900?

If you answered no to any of questions 7, 8, or 9, unfortunately you are not eligible for support under the Bounce Back Loan scheme.

If you answered yes to questions 7, 8, or 9 (as applicable), please return this form with your Bounce Back Loan application form.

SCHEDULE 7: SCHEME GUIDANCE

The Lender will comply with the following Scheme Guidance (and/or such other Scheme Guidance as may be notified to the Lender from time to time):

the Lender Manual; and

the ‘Frequently Asked Questions’ relating to the

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SCHEDULE 10 : SCHEME FACILITY LETTER REQUIREMENTS

The language required in the Scheme Facility Letter as at the date of this Agreement is as follows: “1. BBLS Guarantee

This Lending Facility is supported by the Bounce Back Loan Scheme (BBLS), managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy and Industrial Strategy

Your lender’s ability to provide you with this loan is dependent upon your lender receiving a guarantee from the UK Government under BBLS. The guarantee provides your lender with a full guarantee, should you default on repaying this loan.

You are responsible for the repayment of your loan

The BBLS guarantee is provided to your lender and not to you. You remain responsible for repaying the whole of this loan at all times and if you fail to do so this may negatively affect your credit score or rating with credit rating agencies.

Obligations on your lender

Your lender has agreed in connection with the BBLS to certain obligations in respect of their relationship with you, including making certain information available to you in relation to your loan. For more information, refer to [Lender to add website link] which includes details of your lender’s complaints handling procedure and your right to complain to the Financial Ombudsman Service ”

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Reference FOI 20-102-1

11 November 2020

Dear

RE: Freedom of Information Request

Thank you for the freedom of information request received by the British Business Bank (BBB) on November 1st, where you requested:

How many bounce back loans (and what proportion) have been for less than the amount offered to the business. That is to say – how often has a business been offered, for example,

£40,000 by its lender, but chosen instead to only borrow £30,000?

What is the average difference between the amount offered and the amount accepted? (in the example above, this would be £10,000 of course)?
How many loans (and what proportion) have been below £50,000?
What is the average loan value?
What is the average loan value excluding loans of £50,000?

Response:

Under the Freedom of Information Act 2000 (‘FOIA’), you have the right to:

know whether we hold the information you require, and
be provided with that information or an explanation to what exemption(s) apply

We do not hold information for Questions 1 and 2, but with regards to Questions 3 to 5 the information we hold is as follows:

3. How many loans (and what proportion) have been below £50,000.

865,605 loans of those drawn, which is just over 65% of the total.

4. What is the average loan value?

£30,131.63 (Drawn loans)

5. What is the average loan value excluding loans of £50,000

£19,556.17 (Drawn loans)

If you have any queries about the handling of your request, please let us know.

Your right to an Internal Review under the Freedom of Information Act

Please remember to quote the reference number above in any future communications.

Yours sincerely,

British Business Bank FoI Officer

I would like to know what risk assessments have been made by the British Business Bank (BBB) for possible fraud under the Coronavirus Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Schemes.

In particular I would like to know if an assumption has been made by the BBB for the possible extent of fraud and error under the schemes for planning purposes.

I would also like to enquire what forecasts or provisions have been made by the BBB for the possible extent of unrecoverable loans made under the two schemes.”

Your right to complain under the Freedom of Information Act

1) Please state the total value in Covid-related loans written off as losses due to a) fraud, and b) error

2) Please state the total number of Covid-related loans made by the British Business Bank that were fraudulently obtained by applicants from 1st February 2020 to date.

3) Please state the number of reports of fraudulently obtained Covid-related loans that the British Business Bank has made to police authorities from 1st February 2020 to date.”

Section 29 – the Economy

Section 31 – Prejudice to law enforcement

Section 43(2) – Prejudice to commercial interests

Your right to an Internal Review under the Freedom of Information Act

Your right to complain under the Freedom of Information Act

RE: Freedom of Information Request

Response:

Section 29 – the Economy

Section 31 – Prejudice to law enforcement

Section 43(2) – Prejudice to commercial interests

Your right to an Internal Review under the Freedom of Information Act

RE: Freedom of Information Request

Response:

Section 41 – Information provided in confidence

Section 43(2) – Prejudice to commercial interests

Public Interest Test

Likelihood of prejudice

Public Interest Test

Your right to an Internal Review under the Freedom of Information Act

RE: Freedom of Information Request

Response:

Section 41 – Information provided in confidence

Whether the information has the quality of confidence.

Whether the information was imparted in circumstances importing an obligation of confidence.

Whether the disclosure would be an unauthorised use of the information to the detriment of the confider.

Section 43 – Prejudice to commercial interests

Likelihood of prejudice

Public Interest Test

Section 31 – Prejudice to law enforcement

Your right to an Internal Review under the Freedom of Information Act

RE: Freedom of Information Request

Response:

Section 41 – Information provided in confidence

Section 43 – Prejudice to commercial interests

Likelihood of prejudice

Public Interest Test

Your right to an Internal Review under the Freedom of Information Act

RE: Freedom of Information Request

Response:

Your right to an Internal Review under the Freedom of Information Act

Guarantee Agreement

The Secretary of State for Business, Energy and Industrial Strategy

[·]

The Bounce Back Loan Scheme

CONTENTS

BETWEEN:

BACKGROUND:

1. Definitions, interpretation and effective date of this Agreement

1.2 Interpretation

1.3 Effective Date of this Agreement

1.4 Precedence of this Agreement and the Scheme Guidance

12.3 Regular reporting

13.2 Binding obligations

13.3 Non-conflict with other obligations

13.4 Power and authority

13.5 Authorisations and regulatory standards

13.6 No default

13.7 No misleading information

13.8 Governing law and enforcement

13.9 Good faith

13.10 Compliance with Eligibility Criteria

13.11 Proceedings

14. General undertakings

14.2 Probationary Lender

14.3 Visibility and promotion

14.4 Other Government Schemes

14.5 State aid

14.6 Use of brokers and intermediaries

14.11 Disclosure to Applicants and Borrowers

21. Confidentiality

22. Notices

23. BBB Reporting Systems rights

24. Relationship between the Parties