HSBC has closed its doors on new Bounce Back Loan applications, saying it needs to process loan decisions already in hand.
Small businesses should have until the end of November to apply for a Bounce Back Loan.
To date, 1.3m companies have borrowed £38bn through the Bounce Back Loan Scheme (BBLS).
>See also: Half of small businesses will never repay Bounce Back Loans, warn banks
HSBC halting Bounce Back Loan applications due to huge demand will anger small business customers hoping to sneak under the wire and take out the one-year interest-free loan before November 30.
The bank has approved 194,000 Bounce Back Loans so far worth £5.9bn and said it is approving a new loan every 20 seconds.
It will continue to process applications from existing HSBC customers as well as those made by non-customers before 9am on Wednesday, September 30.
HSBC will be closed to businesses opening new accounts until December 14.
>See also: Lloyds rapped for forcing Bounce Back Loans borrowers to open accounts
An HSBC UK spokesman told the Telegraph: “As one of the only banks that remained open to applications from all UK businesses since the scheme’s launch, we received a huge level of demand. With the scheme closing on Nov 30, we need to focus our resources on fulfilling existing applications.”
This week the business department published its annual report and accounts, which said that nearly two thirds of Bounce Back Loans could never be repaid. If so, that would leave the Treasury staring at a £20bn loss through the scheme.
HSBC has been slammed by small business owners for its ineptitude over Bounce Back Loans applications, with many applicants finding themselves on a magic roundabout of excuses from the bank. One business owner called HSBC’s treatment of Bounce Back Loan applicants a “total shambles”, pushing businesses to the wall.
In turn, the banks feel they were pushed into a hurriedly thought-out scheme with minimal credit checks.
Criminals have set up fake businesses on an industrial scale, successfully applying for government-backed Covid emergency loans – with no intention of paying the money back.
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