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I'd like to share my experience of trying to obtain a coronavirus business loan (the £330bn scheme) from @Barclays
These loans are not what they seem.
If my experience is typical, our economy is in serious trouble.
It's worse than I could have possibly imagined.
1/12
These loans are not what they seem.
If my experience is typical, our economy is in serious trouble.
It's worse than I could have possibly imagined.
1/12
Context - I run a small, R&D heavy business providing assessments typically used in recruitment processes.
We were founded a year ago, and within four months were profitable.
Things were going great - we were expanding, and our future looked bright.
2/12
We were founded a year ago, and within four months were profitable.
Things were going great - we were expanding, and our future looked bright.
2/12
In the six months to March, each month we made a healthy profit. Our R&D was also making great progress.
Then the pandemic hit, and we lost all our business within a few weeks.
I did everything I could to cut expenses while keeping the business alive.
3/12
Then the pandemic hit, and we lost all our business within a few weeks.
I did everything I could to cut expenses while keeping the business alive.
3/12
I furloughed who I could, but I had fixed costs and R&D contracts that I could not exit early.
So, I reached out to my bank, Barclays @BarclaysBizChat
I couldn't get through on the phone, so two weeks ago reached out via the website.
They didn't respond until today.
4/12
So, I reached out to my bank, Barclays @BarclaysBizChat
I couldn't get through on the phone, so two weeks ago reached out via the website.
They didn't respond until today.
4/12
On the call, I shared that my business had been hit hard by coronavirus.
I needed some help to survive until the crisis was over.
The Barclays banker was immediately dismissive "you haven't been trading long enough, we can't lend to you under CBIL".
But, this was a lie.
5/12
I needed some help to survive until the crisis was over.
The Barclays banker was immediately dismissive "you haven't been trading long enough, we can't lend to you under CBIL".
But, this was a lie.
5/12
I knew it was a lie, because they had already offered to lend me money - on the business banking app.
When I log in, it states I can borrow £15,000 on commercial terms.
Just a few taps and the money would be in my account.
But it wasn't enough to survive the crisis.
6/12
When I log in, it states I can borrow £15,000 on commercial terms.
Just a few taps and the money would be in my account.
But it wasn't enough to survive the crisis.
6/12
The banker changed his tone.
Maybe they could lend, but not under CBIL for an amount that could help the business survive the crisis.
I pointed out that at the level of borrowing requested, I could cover the repayments with less than a quarter of my monthly profits...
7/12
Maybe they could lend, but not under CBIL for an amount that could help the business survive the crisis.
I pointed out that at the level of borrowing requested, I could cover the repayments with less than a quarter of my monthly profits...
7/12
The banker paused and started looking through my account.
He started reading aloud my monthly revenue since August of last year... and when he reached March (£0) he laughed and said "oh my, you have been unlucky with the timing".
But I wasn't laughing.
8/12
He started reading aloud my monthly revenue since August of last year... and when he reached March (£0) he laughed and said "oh my, you have been unlucky with the timing".
But I wasn't laughing.
8/12
I asked him, what is the point of CBIL if not to provide viable businesses with a financial bridge?
He said I wouldn't pass their credit review because I didn't have a long enough trading history.
But, I protested, there is no minimum trading length requirement for CBIL?
9/12
He said I wouldn't pass their credit review because I didn't have a long enough trading history.
But, I protested, there is no minimum trading length requirement for CBIL?
9/12
But Barclays wanted evidence of long-term profit before lending under CBIL - a more stringent criteria than commercial loans available on their app
He said "what evidence do you have that your customers will come back". What did he want, a promise from them? Truly bizarre
10/12
He said "what evidence do you have that your customers will come back". What did he want, a promise from them? Truly bizarre
10/12
It has become clear that Barclays are straining every sinew to NOT lend under CBIL.
Erecting ridiculous barriers, even if businesses were making a sustained profit before the crisis hit.
And all this reticence with an 80% government guarantee.
11/12
Erecting ridiculous barriers, even if businesses were making a sustained profit before the crisis hit.
And all this reticence with an 80% government guarantee.
11/12
One other little detail Barclays shared - no business will be approved for a loan of more than 25% of turnover. No matter how profitable - this is government mandated.
This scheme is an utter joke.
Drastic action is needed or thousands of businesses are going to go bust.
END
This scheme is an utter joke.
Drastic action is needed or thousands of businesses are going to go bust.
END
