TIME TO END LOAN DELAYS
High street banks have blamed the British Business Bank (BBB), owned by the UK government and responsible for implementing the coronavirus loans scheme, for delays preventing small businesses across the UK from accessing desperately needed funds.
Several UK lenders have identified the BBB as the intermediary obstructing fast access to COVID-19 emergency cash. Banks have highlighted the body’s lack of resources and complicated processes as key bottlenecks.
Under the terms of the coronavirus business interruption loan scheme launched two weeks ago, banks make their own decisions about which customers to lend to but have to book those loans with the BBB.
Banks across the country must follow BBB rules in order to qualify for the Treasury’s 80% guarantee of the money lend under the scheme.
Patricia Gibson MP commented:
“This is frustration among many businesses seeking loans to ensure wages are paid and businesses remain solvent at this difficult time.
“Lenders are seeing very significant volumes of enquiries and it is imperative that the BBB continues to work closely with them to minimise bureaucracy and delay and make all processes as efficient as possible.”
Lenders have complained that the way the loans are booked is too detailed and has led to a substantial backlog.
Banks suggest less detail should be required upfront but the BBB should have audit rights to assess the loans once paid to ensure banks are following the regulations.
However, some banks have criticised the BBB suggesting that it is following Treasury guidelines far more rigidly than is the case for support schemes in other countries.