APPG on Fairer Business Banking Statement Updates

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Full loan payment holidays needed for business customers

The APPG on Fair Business Banking is calling on The FCA and UK lenders to introduce and proactively offer full 6-month payment holidays on commercial loans for business customers affected by the Covid-19 crisis. Since March, customers with regulated residential mortgages who have been impacted by the pandemic have been able to obtain 3-month, full payment holidays with no adverse effect on their credit rating. Only this week it was announced that payment holidays could be extended until the end of October if necessary. Currently lenders are offering holidays on the capital element, but this is usually a relatively small
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Statement on the APPG recommendation to the Governments in relation to the Covid – 19 financial support measures

With the revised CBILS process underway, it is critical that the focus quite rightly remains on those that are unable to access CBILS via the existing providers, and on ensuring that the processes and eligibility criteria are straightforward and speedy. According to figures released by City AM last night, there have been 309,000 CBILS applications, and only 2,022 approvals worth a combined value of 291.9m. This represents an approval rate of just 0.65%–down from 0.73% when the scheme launched–an average loan size of £144,362, and less than 10% of the scheme funds. We feel it is important to also know
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Statement on the Governments updated finance support package for UK businesses

Following concerns raised by the APPG and others, The Chancellor, Rishi Sunak, has made welcome, rapid and significant improvements to the new Coronavirus Business Loans Interruption Scheme (CBILS). As we wanted, banks will now arrange these loans as the default option, rather than first trying to arrange standard commercial loans and these loans that can range from £5k to £5m will now be available to any SME whose business has been affected by the virus outbreak. The requirement for a personal guarantee has also been dropped for loans under £250k and for loans over that amount a personal guarantee of
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Statement regarding the FCA and BoE announcement on temporary financial relief for customers impacted by Covid – 19

The APPG welcomes the recent announcement by the FCA on the measures it has introduced to protect consumers. Ensuring that customers who had arranged overdrafts will not have their rates increased is particularly welcome. In these uncertain times, we must ensure that everyone is treated fairly and supported. ​ Likewise, we welcome the announcement by the Bank of England that there will be no dividend or bonus payments, and that cash should be held to help the country through this crisis. ​ ​ The events of the last few weeks have highlighted that the financial system is not just a
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Statement from the APPG regarding Fee-Free Overdrafts.

The APPG calls on The FCA to suspend the imminent change to overdraft rules, which will see some interest rates on overdrafts increase tenfold. Due to new FCA rules, from April 2020, banks can only charge for overdraft users a simple annual interest rate – without additional fees and charges so that all users of unarranged overdrafts will be better off or see no change. In many scenarios, however, rates for users of arranged overdrafts will increase significantly, with some rising from as low as 3% to the new industry standard of 39.9%. We commend RBS for delaying the interest
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