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Cesar Basanta
IT consultant Cesar Basanta has had to wait weeks to receive a much-needed loan for his business due to an HSBC error
A technical failure has meant that thousands of government-backed small business loan offers to HSBC clients were submitted under the wrong name.
Client Cesar Basanta told the BBC that he had to wait weeks for a crucial £ 50,000 repayment loan.
For more than two weeks, an error meant that the offer was made in your name, rather than your company.
HSBC said it is correcting the problem and that customers will not be personally liable.
You are writing to clients who have accepted the loan in their own names to make the amendments.
When the chancellor announced government support packages for British companies in April, banks were told not to require personal guarantees from loan applicants below £ 250,000.
Basanta, who runs an IT consulting business that advises large companies on personal data security, says waiting overtime has not been helpful to his company.
“We have stalled,” he said. “We haven’t been able to make any investments. We still have to go ahead, pay taxes, pay the accountants and employees and other things.”
Mr. Basanta applied for the loan and received his offer letter two and a half weeks ago. But instead of having your company name on offer, you listed it as the recipient.
HSBC insists that the error affected only a small percentage of the applications and that the details of the affected clients will be modified.
“We are aware of an administrative error that has affected a small number of our recovery loan offer letters,” the bank said.
“We apologize for the confusion this may have caused and we would like to assure affected customers that they will receive a restatement letter shortly.”
‘No way’
Basanta said he did not want to sign HSBC’s original loan offer letter because he was concerned that he was personally responsible for the money and because the money was not for him individually.
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“When I first opened it, what struck me was the severity of the wording in making the account holder responsible for refunds,” he said.
The offer letter, seen by BBC news, warns borrowers in capital letters to read the document in full and consider legal advice before signing it. She then tells borrowers that they are responsible for paying “the entire loan at all times.”
“Then I saw my name and I thought there was no chance,” he tells the BBC. “It is not me who asks for the loan, it is the company that requests it.”
‘Five minute fix’
He says that after two and a half weeks of repeatedly reporting the error to the bank, he finally received a loan offer letter on behalf of his company.
Now you have accepted the offer and your company has received the loan.
“It was a five minute arrangement that took weeks,” said Basanta. “I learned it, I’m not sure how many other people have.”
He said the bank sent him emails reminding him that he had not accepted the offer and was concerned that his business would lose the loan, which was a “stressful” experience.
In context, the bank approved some 140,000 recovery loans worth £ 4.55 billion in a matter of a couple of months, the same number of small business loans that it would normally make in 10 years.
The recovery loan scheme started in May and offers loans of up to £ 50,000. It is designed to be simpler and faster than the existing Coronavirus Business Interruption Loan Plan (CBILS).
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Chancellor Rishi Sunak was under strong pressure to introduce 100% government-backed loans.
Under the terms of the scheme, the government will cover the cost of fees and interest for the first year, and offers a 100% guarantee to UK lenders.
Companies will only start paying off the loan after 12 months. All lenders will charge a fixed rate of 2.5% and the loans will last up to six years.
