Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme

(asked on 16th November 2020) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what plans his Department has to review the adequacy of the underwriting and risk processes required in advance of an offer being made of a loan under the (a) Coronavirus Business Interruption Loan Scheme Loan and (b) Bounce Back Loan Scheme; and if he will make a statement.


Answered by
Paul Scully Portrait
Paul Scully
This question was answered on 19th November 2020

The Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS) are delegated schemes; meaning the decision to lend to a prospective borrower remains at the discretion of the lender. The rules of the schemes are overseen by the Government in conjunction with the British Business Bank.

CBILS is operated on the same basis as fully commercial loans, with lenders conducting the full range of checks they would usually make, subject to the specific eligibility requirements of the scheme. As part of the BBLS application process lenders undertake fraud checks, including Know Your Customer and Anti Money Laundering checks as required. Lenders do not undertake credit checks for BBLS applications and rely on the information provided by the borrower as part of the application. We continue to review the schemes to consider whether further measures can be introduced to reduce the risk of fraud.

The British Business Bank audits accredited lenders against their compliance with the scheme rules and can take action where lenders are not following the appropriate processes.

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