Bounce back loan issue

louise0910

Hi,

im hoping I can get a bit of advice.

last year I applied and received two bounce back loans for my two businesses.  Everything seemed fine at the time and then bang I received the dreaded letter saying I was extremely clinically vulnerable and had to shield, meaning I was unable to work as I can’t work from home.

Since then, the mixture of going in and out of shielding and repeated lockdowns and restrictions have meant that the work I’ve been able to do over the last year is minimal.  I was expecting to be able to extend the payment break by 6 months as has been advertised to give me time to get back on my feet but I’ve literally just had the rug pulled out from under me.

My bank have been in contact with me (it’s not been easy as I’ve been in hospital and having to deal with it while a patient) and said that as I had two bounce back loans, which they were fine with at the time, I now have to provide evidence of them being separate businesses.  They’re fine with my main businesses as It had been running for a little while but the second one is an issue.  They won’t accept invoices, the agreement where I signed up (it’s a skincare company that I sell products to salons through) or my first tax return as they want “evidence” I was trading before last March and they apparently don’t see this is enough evidence.  I’ve provided commissions statements for the months prior to last March, which should show evidence but they won’t accept it.  

Without providing them with evidence they’re happy with they will not honour any of the extensions or reduced payment options at all apparently and I’m expected to start paying the first payments at the beginning of June.  I should add that I’m classed a self employed so not a company as such.

Has anyone heard of anything like this?  I’m really starting to panic as I’ve had no income for the best part of a year now and we’re in arrears with everything including our mortgage.  This virus has caused such a mess 😔

[Deleted User]

louise0910 said:

Has anyone heard of anything like this?  

Yes. But that's not important.

Ask them what sort of evidence they are looking for. It may be to do with the lack of separate identity of the business.

louise0910

I’ve asked them and they will accept commission statements if the statement itself is in the business name but the company don’t do it that way, they put my name on the commission statement but it has the companies (their) name and details on it too.  This isn’t acceptable apparently.

they’ll accept an accountants letter but my step mum does my accounts as she used to be an accountant but is now retired so that’s not possible.

Vat documents but I don’t trade enough to have those.

Registration certificate in the business name (he won’t explain to me what this means)

Or a license issued by the council but again that’s not applicable to my bussiness.

I can’t understand why they would do this now and not when I applied.  They’re clearly two different businesses with different names, that provide different services.

[Deleted User]

louise0910 said:

I can’t understand why they would do this now and not when I applied.  They’re clearly two different businesses with different names, that provide different services.

The priority at the time was to get loans to those who needed them. Checks were inevitably light.

Although you say the companies had different names, you still need to evidence the existence of the separate business.

noitsnotme

You might be on thin ice because your 2 ‘businesses’ are not 2 separate legal entities.  As a sole trader you are the legal entity you just happen to trade as business 1 and business 2. As a sole trader the loan(s) is(are) in your name.  I expect the proof they are looking for is that your second business is a separate legal entity, which it is not.  I’m kind of surprised they authorised the 2 loans in the first place but I could be wrong.  Perhaps you should approach an independent accountant for professional advice?

louise0910

Deleted_User said:

louise0910 said:

I can’t understand why they would do this now and not when I applied.  They’re clearly two different businesses with different names, that provide different services.

The priority at the time was to get loans to those who needed them. Checks were inevitably light.

Although you say the companies had different names, you still need to evidence the existence of the separate business.

I’m still waiting for him to get back to me on what the registration documents could be but it looks like I’m out of options other than that 😔

noitsnotme said:

You might be on thin ice because your 2 ‘businesses’ are not 2 separate legal entities.  As a sole trader you are the legal entity you just happen to trade as business 1 and business 2. As a sole trader the loan(s) is(are) in your name.  I expect the proof they are looking for is that your second business is a separate legal entity, which it is not.  I’m kind of surprised they authorised the 2 loans in the first place but I could be wrong.  Perhaps you should approach an independent accountant for professional advice?

I actually spoke to an advisor on their chat option through the webpage to ask advice before applying.  They never mentioned anything about this.

noitsnotme

louise0910 said:

Deleted_User said:

louise0910 said:

I can’t understand why they would do this now and not when I applied.  They’re clearly two different businesses with different names, that provide different services.

The priority at the time was to get loans to those who needed them. Checks were inevitably light.

Although you say the companies had different names, you still need to evidence the existence of the separate business.

I’m still waiting for him to get back to me on what the registration documents could be but it looks like I’m out of options other than that 😔

noitsnotme said:

You might be on thin ice because your 2 ‘businesses’ are not 2 separate legal entities.  As a sole trader you are the legal entity you just happen to trade as business 1 and business 2. As a sole trader the loan(s) is(are) in your name.  I expect the proof they are looking for is that your second business is a separate legal entity, which it is not.  I’m kind of surprised they authorised the 2 loans in the first place but I could be wrong.  Perhaps you should approach an independent accountant for professional advice?

I actually spoke to an advisor on their chat option through the webpage to ask advice before applying.  They never mentioned anything about this.

The official BBL guidelines mention only one loan allowed per person or business group.  As a sole trader, your 2 businesses are the same person... you.  And while the ‘per business group’ relates to companies within a higher level holding group, your 2 businesses are kind of in the same group... you.

I might be wrong but it makes when sense looking at the legal entity structures of businesses.  If you had one sole trader business and separate limited company you would be fine.

Perhaps the advisor you spoke to wasn’t clear that you had 2 sole trader businesses.  If you have evidence of an online chat it would be worth checking it and perhaps putting in a complaint if you have been advised incorrectly.

louise0910

I told her exactly what my businesses were at the time and both applications asked if I was a sole trader which I said yes.  It was a chat box on the website so it didn’t save the conversations.

noitsnotme

Did the second application ask if you already had a BBL?

You might want to send a SAR to request a copy of the chat (if they have it), just in case you need it for evidence.  In the meantime speak to an accountant to get professional advice.