MSE News

Tide halts bounce back loan lending, leaving 10,000s stuck on its waiting list

Business banking fintech firm Tide has stopped offering bounce back loans and has closed its waiting list to new borrowers after failing to secure funding to support its lending.

In a blog post on its site, Tide apologised and said it will now be campaigning for the Government to provide the funding for the loans.

But many angry customers have got in touch with us to say that they feel they've been left "high and dry" by Tide, as they've been waiting for the loans for several weeks.

The news also comes a week after Tide performed badly in our bounce back loan survey, receiving a net score for customer satisfaction of -90%, with a staggering 97% of applicants saying they were still waiting for a lending decision.

Bounce back loans allow businesses and sole traders to borrow up to £50,000. They're 100% guaranteed by the Government, meaning that if the borrower is unable to repay, the Government will pay the lender back. However, they're not funded by the Government, meaning lenders like Tide need to be able to lend the initial sum of money.

Tide says it hasn't secured funding to be able to do this and will be pausing bounce back loan applications for now, meaning that if you're one of close to 70,000 applicants on its waiting list you won't get a loan. Tide did say in its blog that if the Government were to change the way the loans work, it would be ready to lend again.

See our Bounce Back Loans guide for full details on how these loans work and who can get one.

What are Tide customers saying?

Many Tide customers have hit out at the company's decision to stop lending bounce back loans, with some getting in touch with us to express their disappointment.

One MoneySaver, Simon, said: "After waiting weeks and weeks for Tide to issue my business with a bounce back loan, I have today received an email stating that Tide will be supplying no further loans. My business has been massively affected by the pandemic and I was pinning my hopes on a bounce back loan to get us through it."

Another, Lee, said: "I have been waiting for a bounce back loan from Tide to support the closure of my training and consultancy business due to coronavirus. I have now been informed that Tide are pausing the scheme due to lack of funds, hoping the Government may provide direct funding to support the scheme in the future. 

"This will devastate my business and I will be forced to close as I have had to cover all bills during this whole lockdown period and cannot financially survive. I feel so poorly let down by Tide."

A third MoneySaver, Danielle, told us: "I have applied for a bounce back loan from Tide. I have opened a new business account with them and that is now up and running. I received an email yesterday to say Tide had stopped offering bounce back loans, but I've tried unsuccessfully to register with other banks."

How did Tide's bounce back loans work?

Tide invited both existing customers and those who didn't already have an account with it to sign up to a waiting list using their email address. It then worked through this list to identify businesses that were registered before 1 March 2020, and were therefore eligible for a bounce back loan.

It then gave access to bounce back loans to eligible businesses on a first-come, first-served basis. At that point, the customer self-certified the information needed for a bounce back loan on behalf of their business, ie, confirmed the turnover of the business, that they have been negatively impacted by coronavirus etc. Applicants were then able to 'activate' the loan and then draw down the money.

Anyone in the Tide application process who hasn't yet activated the loan WON'T now get the cash, but anyone who has activated the loan but hasn't yet drawn down the cash will still be able to do so, as long as they do it within the next six months.

I'd applied for a Tide bounce back loan – what should I do now?

Put bluntly, if you were still waiting for a Tide bounce back loan, your options are sadly relatively limited.

If you're a business customer of a bank that's an accredited lender in the Bounce Back Loan Scheme, you should apply to it if you still need a loan.

If you're not, but you're an existing personal customer of an accredited lender, then you could try and apply to it (though you'll usually need to set up a feeder account first).

If your business accounts are with a bank that isn't part of the scheme, then you may struggle to get a loan quickly. Only three banks appear to be allowing applications from new business customers, and we've heard applicants to all three facing struggles...

  • To apply for a bounce back loan with Barclays, you'll need to open a new business account, and some new customers have reported it taking longer than expected to open a business account.
  • With HSBC, you don't need to open a business account, but you will need to open a feeder account (and again, some applicants have reported long waiting times).
  • With Starling, you'll need to open a new business account (and it's currently not accepting applications for new sole trader accounts). However, do note that Starling is prioritising existing business customers who use Starling as their primary account. Starling's also experienced its own problems – see our MSE to refer Starling bounce back loan complaints to regulator MSE News story for details.

In our recent bounce back loan survey, we found that, overall, only one in two (47%) of all applications from new customers were accepted, compared to nine in 10 (89%) from existing customers.

What does Tide say?

Tide chief executive Oliver Prill said: "It is with a very heavy heart that we announced yesterday that we have to pause lending through the Bounce Back Loan Scheme. As the only non-bank accredited to the scheme, we were in the unique position of having to raise funds to lend from third parties. We had conversations with numerous financial institutions to try to get the funding on the necessary scale, however, the design of the scheme just doesn't meet the requirements of our prospective funding partners.

"We know businesses were relying on Tide for a bounce back loan, and that's what drove us to become accredited and to work so hard to try to get the funding for the scheme. We're very sorry that on this occasion we couldn't rise to this challenge and meet our members' expectations.

"We haven't given up though, and are in conversation with the Treasury, urging them to provide direct access to funding for the scheme. They are already taking the risk by guaranteeing the scheme and they provide funding for the Future Fund already, so we are hopeful that with their 'whatever it takes' attitude they can do this. If the Government can make this change, we stand ready to lend at scale immediately."

The British Business Bank tweeted its response to the news, as seen below:

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