HSBC were the first to flag serious delays in delivering much needed Bounce Back Loans following their introduction on the fourth of May.
The sheer weight of application numbers, set against staff absence and the operational restrictions caused by lockdown, made a hoped for fast turnaround impossible. Four weeks on Nat West continue to struggle under the weight of applications, but prudence and fraud checks to repel scammers are continuing to cause frustrating delays for the Bank and its customers.
The big banks won’t be dropping money into your account the day after you apply for a Bounce Back Loan. It will turn up, but not as quickly as Chancellor Rishi Sunak might have hoped would be the case.
The prospect of a simple seven question application, self-certifying the company turnover used to calculate the maximum loan amount, has attracted the attention of the wrong kind on entrepreneur, and concerns about moral hazard are at the forefront of the Bank’s thinking.
NatWest, has spelt out a series of targets that applicants should expect to have to wait for during the application process: 24 hours to receive initial loan documents after application, followed by 48 hours to approve the loan and a full three working days to transfer the funds, if you get your signed agreement back to them before 5pm.
A six working day target is not ideal for cash starved business if delivered, however it is unclear why NatWest seems unable to match Barclays ability to transfer funds to its customers within 24 hours acceptance.
NatWest has noted that a number of legitimate applications have got stuck in their fraud filters and has assigned a task force to manage this problem when it occurs.
Chancellor Rishi Sunak hoped to deflect attention from the failure of the Covid Business Loan Interruption Scheme with an attention grabbing promise to small business: Seven Questions and 24 hours between your business and the working capital our nation’s commercial backbone needs to weather the storm.
The reality is that the large banks are straining to deliver the simplified scheme.
CBils continue to create problems for Banks who are struggling to reconcile prudential lending and the need to demonstrate affordability, with the complete uncertainty about future revenues and costs faced by businesses who are unable to provide a cash flow forecast with any level of certainty.
A revised scheme may yet be announced to refine the help available to retain jobs and viable business.