A bank had declined an application from a sports training business for a bounce back loan.
What happened
A sole trader with a sports training business contacted us after his bank declined his application for a bounce back loan.
What we said
We found that the bank had conducted a credit check on the trainer embedded within its other checks (for example it's Anti-Money Laundering checks). While this was permitted, the bank wasn’t allowed to rely on the results of the credit check when determining whether to lend – but we found that it effectively had.
We spoke to the bank about its approach. This led to the bank changing its stance and agreeing to review the trainer’s application again. The bank then approved the application, and paid the trainer some compensation for the delay.
Our intervention with the bank, early in the roll-out of bounce back loans, caused it to review those applications it had previously declined on similar grounds, and to change its practice when evaluating subsequent applications.