Bounce Back Loan Top Up Declined
Bounce back loans Top Up Declined: Origins
The Bounce Back Loan Scheme was launched to assist small businesses unable to claim coronavirus funding. However, not every “MAXED” out their application. They disclosed their turnover and made a claim. Assuming they received the amount claimed, many felt a balance was left. NOT TRUE.
As an example, back in May 2020, a client claimed 25% of what they believed was the turnover. Sadly, the turnover they declared incorrect. It represented 50% of the previous 12 months, so they thought. However, they had changed banks midterm and missed the first six months turnover. So they receive 25% of £40,000. Therefore, receiving £10,000.
Realising the error, they contacted the bank, advised them of the error, who responded it was too late to change. The loan was agreed and paid.
Bounce Back Loan Top Up Declined –
So come November, struggling for cash, depleted business, little income, but solvent changes to lockdown take effect.
The chancellor announces that a top-up was to be made available on November 10th 2020. BUT! The client then approaches the bank. But is knocked bank.
A message is received saying, and I quote, “Your Bounce Back Loan is not eligible for additional Top-Up borrowing. This is determined by your current loan amount and the turnover information supplied, which cannot be changed. Our team cannot change this decision.” Note chance to counterclaim?
Is this what SME’s expect? This was not how the chancellor portrayed the top-up.
So a legitimate mistake may not be rectified in the first place. Then no further funds can be made available to top the loan up as per the quote.
The client then asks for help. They ask are they facing liquidation? The company formed a year ago does not yet qualify for a bank loan or overdraft. They have now exhausted seed capital setting up the company. Have little debt, BUT the company now has a cashflow problem. They do not qualify for further support.
Bounce Back Loan Top Up Declined – What next?
Meet the team at HBG Advisory and check HBG Advisory.