Natwest closes SME accounts after coronavirus loan applications
Natwest has closed the accounts of some small business customers who applied for the government’s coronavirus loans to help them through the pandemic, leaving them unable to access their money.
A number of customers contacted the Guardian to complain that their accounts had either been suspended or closed without any explanation after they put in an application for a government loan.
The Natwest Group, which changed its name from RBS last week, said the reasons for closing the accounts were valid.
However, customers told the Guardian they had been approved for loans and were expecting to receive the money in their accounts.
A Natwest spokesperson told City PM: “We know this is a difficult and stressful time for our smallest business customers, and we’ve been working tirelessly to deliver the government schemes in a secure and robust way – successfully supporting 23 per cent of all lending across the three schemes.”
On the cases mentioned in the Guardian report, the bank said: “Unfortunately, not all applications are eligible and investigations confirm that the reason for closing these specific customers’ accounts is valid.”
Banks have lent £12.2bn to 55,674 small and medium businesses during the pandemic under the CBILS scheme. They have also lent £32.8bn in just two months under the bounce back loan scheme, which offers small businesses 100 per cent goverment backed loans up to £50,000.
The Treasury is expected to enter into talks with lenders in a bid to tackle the billions of pounds of bad debts expected under the bounce back scheme.
The Office for Budget Responsibility recently warned that up to 40 per cent of the loans could default, which would cost the taxpayer £16bn.