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Bounce Back Loan MSE Survey results: HSBC & Tide worst service + new customers & sole traders struggle + delays common

Substantial numbers of bounce back loan applicants suffer delays, rejections and credit checks, a survey of more than 5,000 small business applicants has found. While lenders such as Lloyds and RBS performed well with most people rating them great, far more HSBC and Tide applicants rated their experience as poor. 

Since early May, more than 860,000 bounce back loans have been approved by more than a dozen lenders. The loans – aimed at small businesses and worth between £2,000 and £50,000 with no interest charged or repayments needed in the first 12 months – were billed as being easy to apply for and quick to receive the funds. 

Between 19 and 26 June 2020, MSE conducted a detailed survey of 5,580 bounce back loan applicants, and we have now analysed the results, which are below. While not a statistically-representative poll of applicants, it provides a revealing report into the way that bounce back loans work.

Martin's analysis: 'For many, bounce back loans have been a speedy lifeline, but for others the story has been VERY different'

MSE founder Martin Lewis said: "For many, bounce back loans have been – as they were touted by the Chancellor – a speedy lifeline to support businesses and their owners' incomes. Yet for a substantial number of people, the story has been very different with a catalogue of problems.

"One in four have faced delays of over a month. Sole traders, in particular, have suffered being over three times as likely to be rejected as limited companies. Similar is true of small businesses which didn't have business accounts with a firm offering one of these loans, as they've struggled to get any help.

"A significant number cited credit checks as a reason for rejection, even though the loans were touted as 'available to all – no credit checks needed'.

"And of course while the loans were meant to be lender-agnostic as all banks were offering the same product, the experience certainly hasn't been. While Lloyds has 81% net positive feedback, its major competitor HSBC scored a shocking -45%. It was only beaten by challenger bank Tide at -90%, which has failed to give virtually any loans yet. Tellingly, both these two invited new customers to apply – many of whom have had poor experiences.

"We will be sending a dossier of our findings to the Treasury, the Financial Conduct Authority and the British Business Bank to hopefully improve the process going forward."

The six key findings from our bounce back loan survey

1. Lloyds, Bank of Scotland and RBS triumph... while HSBC and Starling leave borrowers with a sour taste in the mouth

Surprisingly, many high street banks smacked the bottom of the challengers when it came to bounce back loan customer satisfaction. Banking giant Lloyds operated the best application process according to the survey, with a net positive score of 81%, followed by Bank of Scotland (65%) and RBS (50%).

Four of the 14 banks were net negative: Barclays and Starling (-1%) only just, but serious issues were found at HSBC (-45%) and challenger bank Tide (-90%), both of which had far more negative feedback than positive.

Some of this is because these banks offered accounts to new starters where there were many problems, yet not all of it is accounted for by that. Even among existing customers, HSBC scored -24% and Starling just 6%.

Overall bounce back loan experience

Lender No. of respondents Net score (1)
Lloyds Bank 590 81%
Bank of Scotland 109 65%
RBS 132 50%
NatWest 565 43%
Santander 727 36%
Metro Bank 75 31%
Yorkshire Bank 96 29%
TSB 128 23%
Clydesdale Bank 61 21%
Co-operative Bank 66 12%
Barclays 776 -1%
Starling Bank 475 -1%
HSBC 1,407 -45%
Tide 292 -90%
(1) Net score is calculated by subtracting the percentage of applicants who said their experience was 'poor' from those who said it was 'great'. The 'OK' votes were excluded.

2. Sole traders let down by bounce back loan scheme, with limited companies far more likely to be accepted

While one in four sole traders who have received an answer were rejected, only 7% of those with limited companies were turned down.

The worst culprit was Starling, which rejected 57% of sole traders, while one-third of sole traders were turned down by TSB, Clydesdale and Metro Bank.

The Starling rejection rate was something we looked at when we sent a dossier on Starling to regulators after receiving complaints about its processes. At the time, we couldn't get data on whether its rejection rates were proportionate – this shows they are much higher than average for sole traders.

In comparison, Starling accepted 93% of applications from limited companies, while TSB, Metro Bank and Clydesdale accepted 81%, 92% and 96% respectively. 

Rejection rates for sole traders & limited companies

Lender Sole traders rejected  Limited companies rejected
Bank of Scotland


(of 53 applications)


(of 40 applications)



(of 152 applications)


(of 317 applications)

Clydesdale Bank


(of 24 applications)


(of 22 applications)

Co-operative Bank


(of 25 applications)


(of 21 applications)



(of 347 applications)


(of 381 applications)

Lloyds Bank


(of 218 applications)


(of 305 applications)

Metro Bank


(of 15 applications)


(of 48 applications)



(of 218 applications)


(of 264 applications)



(of 54 applications)


(of 60 applications)



(of 302 applications)


(of 308 applications)

Starling Bank


 (of 223 applications)


(of 141 applications)



(only 1 application)


(of 7 applications)



(of 63 applications)


(of 43 applications)

Yorkshire Bank


(of 25 applications)


(of 42 applications)

3. One in four waited over a month to hear about 'quick and easy-to-access loans' where funds were supposed to arrive in days

Bounce back loans were originally discussed as being delivered in days, as a speedy solution to business problems in the pandemic. In fact, this is how they were sold by HM Treasury: "Britain's small businesses will be able to apply for quick and easy-to-access loans of up to £50,000 from today – with the cash expected to land within days."

It wasn't that speedy. While 71% of those who've got a decision heard within seven days whether they'd been accepted or rejected, 23% were (or still are) waiting for over a month – that's nearly one in four.

However, what's telling is acceptances tended to be far quicker than rejections. Of those accepted, more than 81% received their acceptance within seven days – though 6% have had to wait a month for their acceptance.

For those rejected, nearly one in four (23%) had to wait for more than a month before they found out they had been turned down, and only 38% found out within seven days. This delay would've compounded the problems for many struggling businesses that were likely on tenterhooks waiting for this money.

Among the worst offenders was HSBC. More than a third of those rejected by HSBC (42%) had to wait more than a month to find out. Meanwhile, only 8% of Bank of Scotland's rejected applicants had to wait that long.

Then we come to challenger bank Tide. It launched its offering late, but a staggering 97% of applicants are still waiting for a decision – a dire and disappointing situation.

Waiting time until decision received

Lender Up to seven days Eight to 14 days 15 days to one month More than one month
Bank of Scotland 92% 5% 2% 1%
Barclays 80% 3% 5% 12%
Clydesdale Bank 68% 12% 12% 8%
Co-operative Bank 73% 22% 4% 2%
HSBC 45% 13% 21% 21%
Lloyds Bank 96% 2% 1% 1%
Metro Bank 94% 6% 0% 0%
NatWest 78% 10% 7% 5%
RBS 84% 8% 3% 4%
Santander 77% 7% 8% 8%
Starling Bank 82% 12% 5% 2%
Tide 50% 0% 25% 25%
TSB 70% 17% 7% 6%
Yorkshire Bank 59% 18% 15% 8%

4. HSBC, TSB and Starling hand out most rejections

While Lloyds Bank and RBS top the acceptance league, with 95% or more of the total applications given loans, not all banks were as keen to say yes.

Starling only accepted 62%, while TSB (72%) and HSBC (80%) also had significantly lower figures, though many of the HSBC rejections were for new customers.

Unfortunately, we can't give you a full picture of the likelihood of rejection from challenger bank Tide, as a staggering 97% of applications are still stuck in its system awaiting a decision.

5. New customers face uphill struggle to get accepted for bounce back loans

Only a handful of lenders opened up bounce back loan applications to new customers, and even some of those eventually restricted them to existing customers.

Overall, only one in two (47%) of all applications from new customers were accepted, compared to nine in 10 (89%) of existing customers.

  • HSBC only accepted 36% of applications from new customers, compared to 94% from existing customers.
  • Starling Bank accepted 58% from new customers (64% from existing customers).
  • Lloyds Bank accepted 82% from new customers (96% from existing customers).

6. Credit scores and credit checks are what scuppered applications for these 'no credit checks needed' loans

When bounce back loans were launched, it was said that credit ratings and affordability checks (both personal and business) wouldn't impact firms' eligibility for the loans, and that applicants wouldn't need to prove the viability of their business.

Yet our survey has flagged that an applicant's credit rating or score was the most commonly cited reason behind rejection. Of more than 300 people who were rejected for bounce back loans, around a quarter cited having failed a credit check, with comments like:

"Because of poor credit rating."

"Credit check failed, they claimed they had a duty of care."

Underneath this – badly explained by many banks, and poorly communicated in the process – is the fact that some banks are carrying out soft credit checks. This means you'll see the search if you check your file, but lenders won't, so it doesn't impact your creditworthiness for future applications.

The British Business Bank (BBB) – which organises bounce back loans – says that while lenders cannot generally undertake credit checks for these applications, they can credit check applicants who are new customers and are opening an account with them for the first time.

Lenders can also do anti-fraud checks, known as anti-money laundering and know your customer checks, on existing customers applying for bounce back loans. These may be 'embedded' in a lender's existing credit checks, but if so, the lender must disregard 'pure credit' related flags (ie, ignore any info purely relating to a customer's creditworthiness when deciding whether to lend).

The BBB says that banks cannot undertake affordability checks as part of bounce back loan applications, as seen in the terms above, yet some anti-money laundering and fraud checks carried out do involve enquiries that are labelled as 'affordability checks' by credit-scoring services.

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