Monthly Archives: October 2020

Hot Business News Today

Banks may call in debt collectors to recoup unpaid Bounce Back Loans

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Originally written by Timothy Adler on Small Business
Banks may outsource repayment of Bounce Back Loans gone bad to external debt collectors because the task will prove too overwhelming inhouse.
The government itself estimates that nearly two thirds of Bounce Back Loans may never be repaid, costing the Treasury £26bn.
Government and the banks are talking about establishing a panel of debt collection agencies that would all follow an agreed code of practice.
>See also: HSBC will not accept any more Bounce Back Loan applications
According to the Times, government officials have already contacted debt collection agencies including Arrow Global to see whether they would chase unpaid Bounce Back Loans. Only when the agency has exhausted chasing repayment would the bank then claim on the 100-per-cent state guarantee.
Lenders say they would have to hire hundreds of staff and build dedicated loan recovery call centres to cope with the volume of bad debts.
Bounce Back Loans are due to start being repaid in May.
Of course, high street lenders have outsourced bad debt collection for years. The collection agency chases the bad loan on a contingency basis, keeping a percentage of any loan repaid as a fee. A large percentage of businesses owing banks money settle immediately once

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Hot Business News Today

Most banks are not allowing small businesses to open bank accounts

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Originally written by Anna Jordan on Small Business
Many banks have stopped accepting new applications for business bank accounts since the coronavirus pandemic surged in the UK.
This is predominantly down to increased demand for government-backed emergency loans like Microbusiness Bounce Back Loans and the Coronavirus Business Interruption Loans. Banks are focusing on providing these and tending to their existing customers’ most pressing needs.
Which banks are still offering business bank accounts?
SmallBusiness.co.uk have spoken to the following banks to find out where they stand on accepting business bank account applications.
HSBC
HSBC closed applications for new business bank accounts on 30th September.
An HSBC UK spokesperson said: “Since the introduction of the Bounce Back Loan Scheme, we have given over £12bn of lending to the UK’s businesses, as part of an overall £20bn package supporting our business and personal customers. As one of the only banks that remained open to applications from all UK businesses since the scheme’s launch, we received a huge level of demand. With the scheme closing on 30 November, we need to focus our resources on fulfilling existing applications. We are no longer accepting new applications for Bounce Back Loans from companies that don’t have an existing HSBC business account and we

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