I know many of you are not going to be looking forward to today, for it does appear like old Boris will be launching his Three-Tier Lockdown initiative later today.
Whilst the finer points of that initiative will be hammered out in this mornings Cobra meeting and announced in the Commons at some point in time this afternoon, it could spell the end for many businesses dotted around the UK.
Its very true to say that many SME’s that took out a Bounce Back Loan have been spending it wisely, with many businesses owners doing everything they can do to make their businesses “Covid Secure”, but as with any business loan it is always the case of “in one hand and out the other”.
The number of business owners coming forward and asking me whether they can top up their Bounce Back Loans, is increasing daily, which indicates many business owners didn’t take the entire 25% of the 2019 calendar year turnover via their BBL’s they could have done, and now wished they had.
Bounce Back Loans Cannot be Topped Up
Bounce Back Loans cannot be topped up or increased in value currently and with no sign that Rishi is going to allow that to happen, many SME’s who were prudent when applying for a BBL, thinking the lock-down and Covid related restrictions would be short term are now regretting their decision not to take out the full amount of the BBL they could have done.
One thing that is expected to happen when a Three-Tier Lock-down scheme is announced is that those business owners who initially decided they could do without a Bounce Back Loan are going to decide they now need one.
Those business owners are going to face a few shocks when and if they do go hunting for a BBL lender to approach unless they have an account with any of the banks that are offering Bounce Back Loans, as only four of them are accepting new customers.
In fact, it is looking increasing likely those last four lenders that are accepting new customers are going to close their doors to new lenders any day soon, which will mean anyone who now needs a BBL is not going to have any lenders to approach.
There are also lots of small business owners who may have been turned down for a simple business account with the last four lenders, or had an account with Tide for example (who have no more money to lend), so unless by some sheer miracle a new lender comes onboard before November the 30th that will accept new customers or the 24 lenders that have never accepted new customers, or recently closed their doors to new customers, turn back on their new account application systems, the number of businesses declined the right to apply for a BBL will increase.
SEISS and JSS Wholly Inadequate for Many SME’s
The third SEISS Grant has been reduced in value for SME’s and as such they are only going to qualify for 20% of their average trading profits. That is a huge slap in the face for many business owners.
The Job Support Scheme is worded in such a way that not all SME’s if any are going to be eligible to claim it, however I am aware the finer points of that scheme are being hammered out, and additional grants are also being worked out too, however many of them are based on the rateable value of an SME’s business premises.
That is not going to help a window cleaner for example who doesn’t have business premises and will see his business decimated when Nightclubs, Pubs, Bookies, Casinos and Restaurants that have been forced to shut their doors and no longer need his or her services due to a lock-lock-down.
Cabbies for example are also struggling right now, in fact the list of SME’s that are going to see a huge negative effective of local-lock-downs on their businesses and income that are not going to qualify for any scheme or grant is huge and will continue to grow over the next few months.
It may also be the case that local Councils will be offering “Discretionary Grants” to those who have missed out on getting financial help due to local lock-downs, but history has proven those schemes often get oversubscribed or are not as “discretionary” as they appear to be.
The one worrying aspect of all of the above, is that Rishi Sunak was wheeled out before the expected “Three-Tier Lock-down” initiative was announced, rather than afterwards, which does somewhat indicate any additional financial rescue packages are not likely to be forthcoming, only those that he announced the other day.
Applying for a Bounce Back Loan
If you are new here and are looking for a list of banks that are accepting new customers then click HERE.
CEO Email Addresses
One way to get some action or some form of update from a bank when you have been waiting a long time for a BBL or bank account (including feeder and servicing accounts updates), is to contact the CEO of the bank and a full list of CEO email addresses are on this page of the website