Recovery Loan Scheme

AmandaMillen

Hello there, I'm new to the forum...just wondering if anyone else has had disapointing results from a Recovery Loan Scheme application?   I got a return email (instantly) from the RBS (with whom I bank!) saying that my request for a loan within this government backed scheme was outwith the bank's appetite for lending.   It feels like we're back in the same position this time last year with the first round of loans on offer that were also being withheld/refused.

Any guidance and help to navigate would be most useful.

Thank you!  Amanda

MattMattMattUK

AmandaMillen said:

Hello there, I'm new to the forum...just wondering if anyone else has had disapointing results from a Recovery Loan Scheme application?   I got a return email (instantly) from the RBS (with whom I bank!) saying that my request for a loan within this government backed scheme was outwith the bank's appetite for lending.   It feels like we're back in the same position this time last year with the first round of loans on offer that were also being withheld/refused.

Any guidance and help to navigate would be most useful.

Thank you!  Amanda

Some people will have had "disappointing" results, others not, it really depends on their circumstances. People who took out a BBL and spent that money entirely on ongoing costs are unlikely to be a sensible proposition for additional lending. People who spent the BBL on investing in their business and have otherwise good financials will probably find it possible to borrow, those without a BBL and no other debt will find it relatively easy.

From what I know nearly all of the BBLs that were declined did so because they were either not compliant with the scheme, the people had been breaking their banks terms and conditions (using personal accounts for business) etc.

sheramber

The bank  need to be sure your future business will have the ability to repay any/all loans.  

Seems they aren't.

MattMattMattUK

sheramber said:

The bank  need to be sure your future business will have the ability to repay any/all loans.  

Seems they aren't.

When I was chatting to my account manager at the bank, he told me that 10% of Bounce Back loans have already been defaulted on, companies gone bust before the repayments even started. I dread to think how much we will end up liable for as a taxpayer by the time the scheme has finished.

justwhat

MattMattMattUK said:

sheramber said:

The bank  need to be sure your future business will have the ability to repay any/all loans.  

Seems they aren't.

When I was chatting to my account manager at the bank, he told me that 10% of Bounce Back loans have already been defaulted on, companies gone bust before the repayments even started. I dread to think how much we will end up liable for as a taxpayer by the time the scheme has finished.

That was always going to happen, fold the company if it has no assets then restart with new directors. The defaults will be allot higher than that.  The carp still has to hit the fan with BBL's.

MattMattMattUK

justwhat said:

MattMattMattUK said:

sheramber said:

The bank  need to be sure your future business will have the ability to repay any/all loans.  

Seems they aren't.

When I was chatting to my account manager at the bank, he told me that 10% of Bounce Back loans have already been defaulted on, companies gone bust before the repayments even started. I dread to think how much we will end up liable for as a taxpayer by the time the scheme has finished.

That was always going to happen, fold the company if it has no assets then restart with new directors. The defaults will be allot higher than that.  The carp still has to hit the fan with BBL's.

Oh I do not doubt that they will be higher by the end, I think the last estimate in the FT was that defaults would exceed 60%, but I was somewhat surprised by the defaults having already hit 10% in February, 3-4 months before repayments are even due to start. 

Thrugelmir

Bases covered. The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill will allow retrospective investigation and action to be taken against directors and can lead to disqualification and personal liability if they are found to have dissolved their company with outstanding debts. 

 

Grumpy_chap

I suspect fraud claims could also be pursued in some cases of companies being wound up after receiving BBLS. Also existing rules about correct procedure to dissolve a company and wrongful trading considerations.

justwhat

Thrugelmir said:

Bases covered. The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill will allow retrospective investigation and action to be taken against directors and can lead to disqualification and personal liability if they are found to have dissolved their company with outstanding debts. 

 

i doubt any director is going to be prosecuted for correctly putting a company into liquidation.  Standard procedure for many companies  to liquidate then restart with a new family member as a director. 

Thrugelmir

justwhat said:

Thrugelmir said:

Bases covered. The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill will allow retrospective investigation and action to be taken against directors and can lead to disqualification and personal liability if they are found to have dissolved their company with outstanding debts. 

 

i doubt any director is going to be prosecuted for correctly putting a company into liquidation.  Standard procedure for many companies  to liquidate then restart with a new family member as a director. 

Isn't going to stop investigations taking place given the sums of money at stake. 

minidressmaker

Hi There,
A little late here

Sorry to hear of your disappointment with RBS, a disappointing result for us would at least be a result as we had applied for the Recovery Loan Scheme in April (9th) with NatWest and have heard nothing from them apart from the automated acknowledgement of application which stated a response within 7 days. We have had the BBL and are up-to-date with repayments 

The 7 days had passed, in fact I had to call them in May to ask whether they had received my application at all. June arrived and still no word from NatWest, I called on numerous occasions during the month of June which resulted in me raising a complaint which prompted a business manager to call and ask for things like; business plan, forecast, business structure, accounts etc.

All provided in a timely manner from us, but again, no word from NatWest. Forward to July, I called again to ask for a decision, was assured a decision would be made by July 27th, again nothing from NatWest. Forward to August, and guess what? still nothing from NatWest. Called NatWest on August 17th, this time I was given a date as 23rd of August as a decision date by the close of business 5pm and still no word from NatWest.  

1.Either, our business plan and application is the most awesome that they'd received and still in shock at how we'd like the opportunity to utilise the scheme which is pledged and backed by the government to help businesses grow and recover.

2.Our magic spell of invisibility has finally worked

We're unsure of what is worse, a rejection or a five nearing six month run around filled with empty promises!