Monthly Archives: October 2020

Hot Business News Today

Nearly two thirds of Bounce Back Loans could go bad, says government

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Originally written by Timothy Adler on Small Business
Nearly two thirds of Bounce Back Loans, designed to help small businesses survive Covid-19, may never be repaid, says the government.
The business department in its latest set of accounts says that up to 60 per cent of Bounce Back Loans, hurriedly introduced in July, could go bad.
If so, that could mean the taxpayer having to find over £20bn to cover small business loans which have defaulted.
>See also: Small businesses have average of just £9,000 left from Bounce Back Loan
The Bounce Back Loan Scheme (BBLS) provides private sector lenders with a 100-per-cent state guarantee on low-interest loans to small companies. It has underwritten £38bn of credit to 1.3 million companies to date.
Overall, the taxpayer faces losses of as much as £23bn so far in bad loans across all the state coronavirus emergency bailout schemes.
Vulnerable to abuse
Yesterday, it emerged that ex-British Business Bank (BBB) CEO Keith Morgan wrote to business secretary Alok Sharma in May, warning that the schemes risked wasting taxpayers money.
Mr Morgan said: “The scheme is vulnerable to abuse by individuals and by participants in organised crime.”
A draft review by PwC had classified the risk of fraud as “very high”, he added.
The BBB, which

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Hot Business News Today

Wait until next year before any business interruption insurance payouts

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Originally written by Timothy Adler on Small Business
Small businesses will have to wait until next year before they see a penny of Covid business interruption insurance payouts.
This is despite a High Court ruling last month, siding with small businesses on many points when it came to whether insurers should honour business interruption insurance which specifically covered pandemics.
The High Court ruled on 21 sample insurance contracts in a test case designed to clear up disputes over whether insurers should pay up.
>See also: Covid expected to cost small businesses £69bn
The eight insurers involved in the High Court ruling have said not to pressure from the financial regulator to settle insurance payouts following the court ruling.
Instead, they will appeal where the High Court sided with watchdog the Financial Conduct Authority (FCA) over wordings in the policies.
Up to 370,000 businesses will be affected by the outcome.
The FCA said: “We had hoped to reach an agreement with the insurers by today [Wednesday] on the interpretation of some important elements of the judgment affecting which small businesses get paid and how much. This would have allowed for faster pay-out for policyholders with eligible claims.”
The nub of the issue is that even when small businesses took out

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