This is as much as I can see now.... as the rest is asking for subscription.....
Banks have asked specialist debt collectors to help lead the recovery of tens of billions of pounds of government-backed small business loans, as they prepare for an expected wave of defaults and fraud cases.
UK Finance, the trade group, is leading discussions to create a centralised “utility” that will deal with defaults on government-backed bounce back loans. It has contacted several potential outsourcers including London-listed Arrow Global to see if they would have enough capacity to support such a scheme, according to people involved in the discussions.
The task is expected to be too onerous to be handled by a single company because of the large number of small businesses forecast to run into trouble, one of the people added.
Banks have lent around £40bn through the bounce back scheme, providing loans of up to £50,000 to more than 1.3m companies. The loans are backed by a 100 per cent government guarantee, but banks have to prove they have made a thorough effort to recover the cash before claiming the money from the government.
One executive at a high street bank said: “Access to a shared operational utility is a good thing to do in terms of cost efficiency. More importantly, it gives consistency for customer treatment and conduct outcomes.”
Another stressed that they did not expect to save much money through the utility, but said it would help shield individual lenders from criticism. The issue is particularly sensitive for banks such as Lloyds and NatWest, which have been accused of mistreating small businesses in the past.
The sheer scale of bounce back loan recoveries will be so significant for the taxpayer and the wider economy that the Treasury and the banks will have to come to a consensus approach
