British Business Bank publishes Reservation Notice and Ministerial Direction for the Bounce Back Loan Scheme
Today, the British Business Bank (‘the Bank’) has published a Reservation Notice relating to the Bounce Back Loan Scheme. This Notice took the form of a letter, from Keith Morgan CBE, (former) Chief Executive Officer & Accounting Officer, British Business Bank, written on behalf of the Board, to the Bank’s sole Shareholder, the Rt Hon Alok Sharma MP, Secretary of State, Department for Business, Energy & Industrial Strategy (‘BEIS’). It was sent on 2 May 2020 in advance of the scheme being launched on 4 May 2020.
About the Bounce Back Loan Scheme
The Bounce Back Loan Scheme (‘the Scheme’) enables small and medium-sized businesses currently affected by Covid-19 to access finance more quickly. Businesses are required to fill in an online application form on their lender’s website, which self-certifies whether they are eligible for a Bounce Back Loan facility.
The Bank recognised the imperative to act at pace in order to respond to the unprecedented situation facing smaller businesses across the UK. The Scheme has supported over 1.2 million UK smaller businesses to access significant volumes of emergency finance, with £38bn drawn down to date (as at 22 September 2020).
Since launch the Bank has worked alongside the government and the finance industry to mitigate the issues raised in the Reservation Notice. The Bank’s concerns relating to the fraud risks within the Scheme, have been mitigated by accredited lenders undertaking standard fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks as part of the Scheme’s application process. In addition, the Bank, the government, fraud prevention services, fraud bureaux and the banking and alternative finance sectors have acted swiftly post-Scheme launch to put in place additional measures, beyond the standard checks, to further mitigate fraud risks.
The Bank has also worked with lenders and HMG colleagues to implement BBLS successfully, including accrediting a range of lenders forming a diverse set of providers under the Scheme.