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Mon 28 September 2020
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Adrian Goldberg speaks to business owners who say their attempts to secure a Bounce Back Loan from the bank during the Coronavirus crisis has only added to their problems

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The fate of hundreds of small businesses has been thrown into jeopardy because of delays by HSBC in handling a Government-backed loan scheme.

One company owner has condemned what he describes as the bank’s “unbelievably dreadful non-service” in administering Bounce Back Loans (or BBLs) which are designed to improve the cash flow of firms struggling with the impact of the Coronavirus. Another said that the process had given him nothing but “anxiety and unnecessary stress”.

BBLs were launched early last month, following criticism that previous Treasury initiatives aimed at helping ailing companies were too difficult to navigate for many smaller businesses and sole traders.

This is supposed to help businesses like mine manage to survive but instead it has given me anxiety and unnecessary stress

Mark Anthony, Online Retailer, Slough

The new loans were capped at £50,000 and are underwritten by the taxpayer, making them risk-free for lenders. When they were launched, the Chancellor Rishi Sunak boasted that BBLs would provide “a quick, easy, simple solution” to firms desperate for cash to stay afloat.

But, despite the Treasury’s good intentions, many small business owners say that HSBC’s inability to handle the volume of applications received has only added to their stress.

In some cases, traders have been told they are eligible for a loan, but are still waiting weeks later for a pay out. Others are unable to apply, because they first have to join a waiting list to open an HSBC account and have no idea when they will be accepted. Even existing HSBC customers are having difficulty obtaining the loans.


Philip Taylor and his partner Tricia run The Whale Tale Café in Lancaster, which has had an HSBC business account for 18 years. The couple applied for a £30,000 BBL on 4 May but, after receiving an acknowledgement for his application, he has heard nothing since.

Philip said: “I’ve phoned HSBC about 12 times. The average wait time for connection is about 40 minutes. Each time I have been told that there is no timescale, that HSBC can give me no updates or information.” The award-winning vegetarian café provides jobs for 14 people but Philip warned that the delay and uncertainty “is threatening the future of the business”. Even after a business is approved for a loan, there is no guarantee it will receive it. 

Philip runs a separate monumental masons business, which has had an HSBC account for 28 years, and applied for a £25,000 BBL for that company too. The loan was approved and Philip was asked to send a digital signature or “echosign” on 12 May to seal the deal. The following day he received an acknowledgement from HSBC. He confidently expected the cash to arrive after checking its website which stated: “You will receive the funds in your account within a few days of signing and returning the echosign form”. Yet, more than a month later, the cash still hasn’t arrived.

Ironically, Philip had previously secured approval for another Government loan known as a CBIL (Coronavirus Business Interruption Loan) but was advised to withdraw his application when BBLs were introduced. “They told me I would receive funds quicker with a Bounce Back Loan” he observed.

Philip, who said he has never had cause to complain about HSBC before, described the past months as “seven weeks of unbelievably dreadful non-service from a huge international business”.


It has been a similar story for others. The supply lines of Mark Antony, an online retailer from Slough, were badly affected by the Coronavirus in China and mainland Europe. He applied for a BBL at the end of May to replenish his stock but, although his application was approved within hours, he still hasn’t received the loan.

Two of his staff have already lost their jobs, and now the remaining three workers are facing the threat of redundancy. Mark said: “I am sick of this. This is supposed to help businesses like mine manage to survive but instead it has given me anxiety and unnecessary stress.”

Part of the problem lies in the terms of the scheme being so attractive. The interest rate is zero for the first 12 months and, after that, is only charged at 2.5% for up to six years.

In these straitened times, it is little wonder that hard-pressed firms are queuing up for cheap money. Perhaps anticipating the huge demand, many high street banks will only accept BBL applications from existing customers. HSBC was different – saying that non-customers were welcome as long as they signed up to what it calls a “feeder” account. Unfortunately, this has only added another layer of bureaucracy to the scheme.

Loretta Caughlin who runs The Front Room café in Penzance explained that the bank she normally uses for her business isn’t an accredited lender for the scheme so she had to seek an alternative – which led her to HSBC.

“The situation that we’re in is that we can’t apply for a Bounce Back Loan until our feeder account application has been approved, but there’s a waiting list for that and we don’t know how long it will take,” she said. “It’s incredibly frustrating. Even when we do end up making our Bounce Bank Loan application we don’t know if it will be accepted.”

Loretta warned that her café is at risk if the uncertainty over her loan isn’t removed.

Discussion groups on Facebook have been deluged by hundreds of entrepreneurs who fear their firms will go out of business unless the issue is resolved. Many of those posting comments talk about the stress caused by HSBC’s handling of their application, with one pleading desperately: “I need to feed my five children.”

The Treasury emphasised that the scheme was designed to be accessible to as many small firms as possible, with a minimum of obstacles. A spokesperson said: “Approvals are a decision for lenders, and we are working closely with them to ensure the schemes are a success. Latest figures show more than 800,000 Bounce Back Loans worth over £26 billion have been made to small businesses.”

HSBC said it has seen “unprecedented demand for Bounce Back Loans” and that it has approved more than 128,000 of them so far. A spokesperson said it had been “working hard to get these much-needed loans to our customers as quickly as possible”.

“As one of the few banks accepting applications from businesses that aren’t currently our customers, we’ve been inundated with requests to open accounts,” they added. “As a result, the wait times for new accounts are significantly longer than they were pre-COVID-19. We continue to advise businesses to apply for the loan with their existing bank if possible because it will be much quicker.”


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