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Government-backed loan schemes in the context of the Covid-19 pandemic

On this page we outline how we can help with complaints about the Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Schemes (BBLS) that were established to help provide financial support to businesses in the context of the Covid-19 pandemic.

 

On this page

  1. What are the Government-backed loan schemes?
  2. Types of complaint we see
  3. What we look at
  4. How to complain
  5. Putting things right
  6. Case studies
  7. Other useful resources

What are the Government-backed loan schemes?

In Spring 2020, the Government established various emergency loan schemes for businesses of different sizes, including: the Bounce Back Loan Scheme (BBLS) for small businesses and the Coronavirus Business Interruption Loan Scheme (CBILS) for small and medium-sized businesses. In April 2021, as these schemes closed to new applications, the Government established a new loan scheme: the Recovery Loan Scheme (RLS). You can find more information about these schemes on the British Business Bank’s website.

Types of complaint we see

We have seen complaints relating to BBLS and CBILS from companies, sole traders, partnerships and charities. In most cases, the complaint has been about how the loan application has been handled by a financial business (a bank or lender), and in some cases about the application to open an account to make the loan application.

We’ve also received complaints about the length of time it’s taken for the application to be considered and for the funds to be made available. We’ve also had complaints about funds being withdrawn by the lender or the account being suddenly restricted or closed.

What we look at

When we consider a complaint, we want to determine what is fair and reasonable in all the circumstances of the individual complaint.

To help us consider a complaint fairly, we’ll ask you to provide some information. We’ll also gather information from the lender. We’ll make our decision about what happened using evidence provided by you, the financial business and any relevant third parties.

We will take into account all applicable regulations, rules and law, including any industry codes or regulatory guidance.

How to complain

If you believe you’ve been treated unfairly by a lender, you should talk first to the lender so they have the chance to put things right. They need to give you their final response within eight weeks – find out more about time limits affecting your complaint. If you’re unhappy with their response, or if they don’t respond, you can contact us. 

Bringing a complaint to us is straightforward and won’t cost you anything. We’ll check your complaint is something we can deal with, and if it is, we’ll investigate.

Find out more about how to complain.

Putting things right

If we decide that a financial business has made a mistake or treated you unfairly and you’ve lost out as a result, we have the power to put things right. Usually, we’ll tell the lender to put you back in the position you would have been in had things not gone wrong. 

Find out more about our approach to calculating compensation.

Case studies

Here is a selection of case studies that illustrate the range of ways we investigate and resolve complaints.

 

  • What happened

    A small business making car parts complained that their bank had turned down their application for a "feeder" bank account, leaving them unable to apply for a bounce back loan. The directors were unhappy that the account application appeared to be subject to a credit check, when applications for the bounce back loan weren’t.

    What we said

    We said that the bank had the discretion to decide the basis on which it would accept new customers. So while bounce back loan applications weren’t subject to a credit check, the bank was entitled to assess the business against its usual criteria to open an account.

    We checked that the bank was applying its processes consistently, and we reviewed how it had handled the business’s application. We thought the bank had handled the assessment fairly and could see why it hadn’t met the bank’s criteria. So we didn’t think the bank had acted unfairly and didn’t ask it to do anything more.

  • What happened

    A café owner was having issues opening a "feeder" bank account with her bank – she told us she'd been getting mixed messages and making no progress, despite already holding another account with them. She’d raised a complaint but not heard back. The prolonged closure of her café was putting her business at risk.

    What we said

    We quickly got in touch with the bank and asked them to take another look as we couldn’t see any good reason for the hold-up and could see the urgent need for the loan.

    The bank duly sorted the issues and the account was opened a few days later. The café owner got back in touch with us to let us know she’d received the loan and that she thought this would help her business to continue.

  • What happened

    A sole trader with a sports training business contacted us after his bank declined his application for a bounce back loan.

    What we said

    We found that the bank had conducted a credit check on the trainer embedded within its other checks (for example it's Anti-Money Laundering checks). While this was permitted, the bank wasn’t allowed to rely on the results of the credit check when determining whether to lend – but we found that it effectively had.

    We spoke to the bank about its approach. This led to the bank changing its stance and agreeing to review the trainer’s application again. The bank then approved the application, and paid the trainer some compensation for the delay.

    Our intervention with the bank, early in the roll-out of bounce back loans, caused it to review those applications it had previously declined on similar grounds, and to change its practice when evaluating subsequent applications.

Other useful resources