Rejected for Bounceback as I took a payment freeze

elgarsrondo

At the beginning of the Corona virus crisis I took forbearance where I could get it so as to protect my outgoings as I wasn't sure what was coming in over the next few months.
I had a personal loan with Natwest and went through their payment freeze forbearance procedure.
When the government announced Bounceback Loans I applied and unlike most have been fighting for any updates for a month now.  I was unsure as to why my application was so heavily delayed.  This week I finally got some answers.
Apparently the payment freeze for my personal loan put a 'flag' on my account meaning I would be unable to get any Bounceback loan.  The business advisor I was dealing with surprisingly agreed with my views that this wasn't particuarly fair as we had been told that payment freezes wouldn't affect us financially.  She used the words that she thought this broke the banks ethos and she thought it was immoral and other customers had been similarly effected and spent the next week fighting my corner with senior management.  
That fight was completed today and whilst my application had been cancelled she agreed to put it all back through on my behalf and remove the flag, so hopefully something will move forward now.
Wondered if this was something that was generally understood? If other people have experienced this?
I was rejected for a Starling bounceback loan with no explanation.  I wonder if this was for any similar reason.

jonesMUFCforever

Do you have a business account with Nat West and Starling?

SeanG79

If you have been declined for Bounceback by both NatWest and Starling, it would indicate that there is likely something else, besides the forbearance request. 

As an aside, if someone had requested forbearance on a loan with they took out with you, would you be giving them more money whilst not being paid on the previous loan? In addition, had it not been for Covid-19, would NatWest have lent you more money when considering existing exposure?

jonesMUFCforever

SeanG79 I agree 100% with what you say ... BUT ...the Bounceback loans are 100% guaranteed by the government so it makes good sense for say Nat West to issue these loans at 2.5% as long as the OP holds a Business account - so far he/she has not confirmed this.

Grumpy_chap

I am not sure how great the Government guarantee is for the banks - yes, obviously, as a point of last resort, it protects the banks.  I am sure the banks will need to go to some considerable effort and cost in pursuing recovery through normal processes before they will be allowed to just give in and ask the Government to cover the debt.  Similarly, I am sure it will not be an easy ride for and BBLS borrowers to just walk away from the liability.

Fighter1986

jonesMUFCforever said:

SeanG79 I agree 100% with what you say ... BUT ...the Bounceback loans are 100% guaranteed by the government so it makes good sense for say Nat West to issue these loans at 2.5% as long as the OP holds a Business account - so far he/she has not confirmed this.

The banks are still under a regulatory obligation to exercise due diligence when assessing a borrowers ability to repay a loan, otherwise they'd be setting themselves up for an irresponsible lending complaint. 

Grumpy_chap

I understood that part of the criteria are that the bank would lend the money to the business "but for" any impacts arising because of coronavirus.  Not sure where I read that.

It does say in the FAQ that "application form also requires confirmations to be given in relation to losses that may be incurred, impact on credit rating, financial risk to personal assets (other than primary residence and primary personal vehicle), reduced consumer protection provisions, data protection consents and that lenders will not assess affordability."

How is the "impact on credit rating" to be read? 

• Does it mean the bank looks at credit rating upfront?  
• Does it mean the bank reports the debt so it affects credit rating for other borrowing?  
• Does it mean impact on credit rating upon default?
• Does it mean all of the above?

SeanG79

jonesMUFCforever said:

SeanG79 I agree 100% with what you say ... BUT ...the Bounceback loans are 100% guaranteed by the government so it makes good sense for say Nat West to issue these loans at 2.5% as long as the OP holds a Business account - so far he/she has not confirmed this.

Whilst the loans are guaranteed 100% by the Government, the lenders have been given a fairly strict criteria that has to be met and claiming on the guarantee doesn't appear to be as straight forward as all the speeches on TV would have one believe. 

The BBL loans do however appear MUCH easier to get approval for than the CBILS, which has been somewhat of a nightmare. 

maxximus75

I'm wondering if an AP marker is showing on your credit report due to the forbearance?

This will stop you getting any loans, personal or business I would think?