Bounce Bank Loans Status Update

Coronavirus, Finance,

As of the 24th May, Government figures have shown Bounce Back Loans (BBLS) have accounted for £18.49bn of lending to 608,069 borrowers, from 769,137 applications. That’s an approval rate of 79%. There are some very interesting statistics around the scheme:

  • BBLS lending in the first week of the scheme exceeded the total CBILS lending from inception to date.
  • The average BBLS has been approved at £30,534.
  • The number of approvals has reduced over the last 2 weeks, from 268,173 to 196,220, which is supported by our clients, any of whom have now received funds.

Since the scheme launched, there have been additions to the panel of lenders, and some have struggled:

  • Barclays have been dogged with issues from the launch of its online portal. In particular it seems to that long standing customers are worst affected, perhaps as a result of Money Laundering records from before regulation changes in the last 10 years being less accurate.
  • HSBC continue to be the only bank who will accept applications from non-customers, although they are taking 3-5 working days to come through.
  • Starling require you to move your main business bank account to them as part of the BBLS application process. They are warning that their usual speedy account opening process will take longer as they’re receiving so many new account applications. Their current estimate is a still-impressive 96 hours.
  • Tide will also require you to open an account with them, but as far as we’re aware there is no requirement to make this your primary business bank account.
  • Metro Bank have updated their website to suggest that they are nearing the end of a very long approval process through the British Business Bank. Our source suggests that they are currently testing their online system and hope to start accepting applications next week. We will of course keep you posted as this has been a very hot topic in recent weeks!
  • Co-op Bank are one to be very wary of, in our opinion! The small print of their agreement stipulates that you cannot take dividends from the company without their written permission until the loan in cleared. Given that most small business owners take their remuneration by way of a small salary and dividends, this would have a considerable tax implication. A reminder to read the small print before you sign!

If you haven’t yet applied or received your BBLS loan, there is still time, but do ensure that you can afford to support the borrowing, and have a plan to put it to good use within the business. With those criteria in place, the opportunity is there for the scheme to be the key to survival for some businesses, and provide a boost of capital for others.

As ever, if you’re unsure of the best move to make next and would like to talk through your options, please get in touch.


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