Bounce Back Loan / HSBC Feeder account

Jeremy535897

kingcheese805 said:

Hi All, we got an email from HSBC today please do read the small print, I have not called them yet as its a whole day affair, however, point 12 on the agreement called set off says ( Not sure if they mean from personal accounts) this is a business application any thoughts?

If you have money in one of your accounts (except for trust, client or joint accounts), we may set it off against any amount you owe us which is due for payment on other accounts (including money you owe on a joint account) so it reduces or repays the amount you owe us. We'll only do this with accounts in your name and after we have checked that you have enough left in your accounts to cover essential living costs

Bank standard wording that allows them to collect arrears on a loan from another account owned by the borrrower.

kingcheese805

Ah but a company is a sperate legal entity, so legally the company is doing the borrowing, not the individual, if the company goes into liquidation due to mismanagement then the director or shareholders can be held responsible personally but not before, from a legal standpoint the company made the loan application, we as individuals did not, so I'm not sure how that paragraph has anything to do with us as individuals, we did not make a loan application in our own personal capacity, that is the whole point of the scheme, please correct me if I'm wrong, furthermore if you read the rest of the document (when get it) you will notice that the restrictions are all related to business undertakings and that the funds should be used for business only that is why I'm not sure how the essential living costs point comes in its completely contradictory.

An example you have a business bounce back loan to keep your company going, the company fails, you forced to sell your house to survive, the bank takes your small profit off its sale to cover your unrelated, failed business loan ??? ludicrous

Jeremy535897

It is a standard clause, as I said. It is addressed to the borrower. If the borrower is a limited company it won't have any living costs. It only allows set off between accounts in the limited company's name. There is no recourse to directors except in the usual cases of fraud. See the FAQs here:
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/faqs-for-small-businesses/

"What happens if I find I’m struggling to repay the loan?

You should talk to the lender if you are experiencing financial difficulties and they will have standard processes in place to support customers in those circumstances.

Lenders are not permitted to require personal guarantees for the Bounce Back Loan Scheme.

For sole traders or small partnerships, who often risk their personal assets when borrowing, the terms of the Bounce Back Loan Scheme means no recovery action can be taken over a principal private residence or a primary personal vehicle."

[Deleted User]

@Mrsgreenwood04 Nothing. It's best not rely on this scheme anymore. We've paying taxes for years, we haven't claimed any support from the government and can't even access scheme supported by our own taxes.

[Deleted User]

@kingcheese805 It's best to separate our personal and business banking at some point and not to keep everything with the same bank. Depending on the structure of the business (shareholdering, numbers of directors etc), the bank would tend to look at the relationship as a whole. If there are flags on the personal finance, they may flag the business account and vice versa.

kingcheese805

Fully understood and I appreciate your response, the document even though the standard, is still ambiguous, I agree on all you have said and this is standard business practice/understanding, but reading the agreement, it doesn't mention limited companies it clearly outlines the exclusions ( Trusts, Charities, etc) it does not mention Limited company at all, lastly, I do agree that the document needs to be as generic as possible as it covers Sole traders as well, despite this, point twelve in this documents seems to try bridge the gap between a company and personal, it could have been written much better, as to how it reads is what one would agree too.

Jeremy535897

The extract from the FAQs I quoted could not be clearer:
"Lenders are not permitted to require personal guarantees for the Bounce Back Loan Scheme."

The loan agreement is addressed to the borrower, in your case a limited company. The wording you quoted starts "If you have money in one of your accounts ". That is talking about set off between accounts owned by the borrower, the limited company. It can't allow the bank to set off a loan to the company against your personal bank account, or anyone else's bank account. The clause is standard and covers loans to sole traders as well, hence the bit about living expenses, which is actually a protection, not a penalty.

Gavinpp

Hi has anyone heard anything from HSBC about there feeder account for the bounce back loan scheme ... applied a week ago and not heard a thing 

cheers 

Gavin 

jas71

Same here, I applied for a feeder account with HSBC on Monday 4th May was told I would be contacted within 5 days heard nothing so called again Monday 11th May for an update was told I should receive a callback and give it another 3 days, not holding my breathe

jas71

Article from IFA:

Many qualifying applications from last Monday are still to receive funds a week on. 

HSBC revealed yesterday, Sunday the 10th, that the bank now has no time frame within which it will deliver BBIL loans to applicants. Previously staff had been telling customers to expect five to seven days, and it was widely reported that loans would only take 24 hours. 

Over the weekend, customer questions were met with: “we have no way of telling you“. 

HSBC designed a “Black Box” application system. This means an application is posted in one side, and the loan is issued from the other side if it is successful. But while the application is in the process it cannot be seen. Like Schrodinger’s cat

Challenged on this approach, the response is that customers don’t need to know when their funds will arrive.