The guidelines clearly state that the decision to lend rests with the lender, who will make assessments that the loan is affordable for the business and will be used for a suitable business purpose.
The borrowing proposition must be something the lender would consider viable were it not for coronavirus.
In no way are Bounce Back Loans meant to be banks just throwing money at people who “just really really need it because coronavirus” blindly backed by a government guarantee.
I mean, the possibility of rejection must have been factored in, because the scheme guidelines have a policy on what business owners can do if they are rejected.
Makes me wonder if they haven’t differentiated the decision making process effectively between CBILS and BBLS as CBILS does involve all the different viability checks.
The application form actually expressly forbids the credit/affordability checks that Starling have done from being done
I/We understand that the lender will not conduct any form of credit or affordability check and accepts no responsibility, whether arising in contract, tort (including negligence) or otherwise, for my/our decision to borrow. I/We also understand that the lender may register its Bounce Back Loan with credit reference agencies, and that my credit rating may be affected by any failure or delay in repaying
They of course have every right to apply their own criteria. However, they should have been upfront with customers before applying that credit history would be taken into account as it conflicts information many seem to have been told. Many people on social media seem to think a poor credit history should not be a barrier to a BBL.
I do think the hashtag on social media is a bit out of order though. Fair enough people can be annoyed but some of the comments I’ve seen are definitely going too far.
There’s a big question mark in my mind over a process that doesn’t check affordability, but leaves all the usual recovery processes intact. You’re effectively leaving it up to individuals to decide if they can repay.
People may be angry about rejection, because the government message was more or less “free loans”, but it may turn out to be a blessing for some later on.
The sole traders applying are presumably those who don’t qualify for the SEISS, eg because they earn above the threshold or, more likely, don’t have the trading history. If it’s the latter, then they’re going to be risky customers and are the group least likely to have business left on the other side.
It’s probably an automated system with little human input. The automation probably doesn’t understand the nuances and therefore will reject people. Before the case is actually read. I would find it very interesting to know how they are doing eligibility checks given the very uncertain circumstances
I’m not so sure about that. Anne Boden posted something similar on Sunday and the only thing to come from that was the article I linked earlier in the thread
It’s not just a waitlist. Anyone signing up to go onto it is agreeing to a credit check. So it’s clearly just there to vet people before they are even allowed to see the bounce back loan application which forbids credit/affordability checks. By which point there’s no need for Starling to do a credit affordability check because they’ve already done one at the waitlist stage. Starling want to cherry pick the less risky customers while palming the more risky ones off to the legacy banks who are following the scheme rules (for now)
I think it’s fair to say that sole traders should perhaps be careful about applying for a bounce-back loan, and consider if it might be better to wind up their business now rather than have it wound up a few months down the line and with a credit default against them. I think they’re trying to avoid the ‘easy credit’ trap that some could fall in to. But very difficult to get the messaging and balance right.
Finally switched my salary to Starling. Been meaning to for a while now as I’ve felt like Monzo have just stalled and aren’t doing any of the things I want from a great current account.
Non flashy things that I need a current account for.
I don’t take an active interest in what Monzo are up to any more, but the last impression I had was that developing new features that can’t be easily be monetised just wasn’t a priority.
And from I see of Starling of late, they seem to be on it.
You can do that with Monzo, but fair enough on the other points, whatever floats your boat
There’s 2 issues that bother me off your list, first being cheque imaging, but I’m not sure I care about keeping another account to do this, If Monzo add it then great, if they don’t then oh well.
The other is payee management, but I have high hopes that will be addressed by Monzo soon so i’ll stay hopeful on that.
I actually downloaded Starling the other day after some of the comments on here, for me there’s too many things Monzo do that Starling don’t, plus I hate the Starling UI. Personally I’d pay more attention to Revolut than Starling with their new UI. They’re doing some great things too.
