Originally written by Timothy Adler on Small Business
Lloyds has been named and shamed with for forcing small businesses to open paid-for business current accounts to access Bounce Back Loans.
The competition watchdog said that Lloyds, one of the largest in the small business market, treated small companies unfairly by requiring them to open an account to draw down state-backed Bounce Back Loans.
The Competition and Markets Authority that 30,000 customers who had been running their businesses using personal accounts were told by Lloyds and its Bank of Scotland arm that they must open a business account to access Bounce Back Loans.
>See also: Banks ‘will be pushed’ into closing down SMEs unable to repay Covid debt
The scheme, which has underwritten £35.5bn of credit, provides lenders with a 100-per-cent state guarantee on low-interest loans to qualifying small companies. High street banks, rather than the government, have to provide the working capital.
Back in 2002, Lloyds agreed not to ask personal account customers to open a separate account if they wanted to borrow money from the bank – a practice known as “bundling”.
But when it came to Bounce Back Loans, Lloyds asked existing customers operating their firms out of personal accounts to open fee-charging business accounts
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Lloyds rapped for forcing Bounce Back Loans borrowers to open accounts
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Lloyds has been named and shamed with for forcing small businesses to open paid-for business current accounts to access Bounce Back Loans.
The competition watchdog said that Lloyds, one of the largest in the small business market, treated small companies unfairly by requiring them to open an account to draw down state-backed Bounce Back Loans.
The Competition and Markets Authority that 30,000 customers who had been running their businesses using personal accounts were told by Lloyds and its Bank of Scotland arm that they must open a business account to access Bounce Back Loans.
>See also: Banks ‘will be pushed’ into closing down SMEs unable to repay Covid debt
The scheme, which has underwritten £35.5bn of credit, provides lenders with a 100-per-cent state guarantee on low-interest loans to qualifying small companies. High street banks, rather than the government, have to provide the working capital.
Back in 2002, Lloyds agreed not to ask personal account customers to open a separate account if they wanted to borrow money from the bank – a practice known as “bundling”.
But when it came to Bounce Back Loans, Lloyds asked existing customers operating their firms out of personal accounts to open fee-charging business accounts
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State could take equity in small businesses, suggests Lloyds chairman
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Lord Blackwell, chairman of Lloyds Banking Group, has suggested the government could end up owning equity in thousands of small businesses.
The Lloyds chairman thinks the government would be better off converting loans it is already guaranteeing into equity stakes in small businesses if loans go bad.
Banks and the government would need to work together to “think about how we transform some of that debt that they’ve accumulated into some other kind of security”, he said.
The Bounce Back Loans scheme, which launched on Monday, May 4, lent over £2bn to more than 69,000 small businesses within its first 24 hours.
The parallel Coronavirus Business Interruption Loan Scheme (CBILS) has lent £5.5bn to 33,812 businesses since its launch on March 23.
Lord Blackwell, 67, told an online seminar organised by City & Financial Global that debts could be converted into equity or an equity-type of security.
Viable businesses
Government and banks “do need to think about what will be required to recapitalise some of those businesses to ensure that they are viable going forward and otherwise viable businesses aren’t forced into insolvency or liquidation”, he said.
Devising a solution “needs working through urgently so that we can give businesses some
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Interview with Jon Hopper of Lloyds
by Ben Lobel • • 0 Comments
Jon Hopper is the commercial director of business banking at Lloyds. In this piece, we catch up with him about Brexit, the technological changes that are empowering small companies, and how international trade offers true opportunities for SMEs to expand. What is your role and how long have you been with Lloyds? I’m the commercial
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