The Treasury has warned brokers, and others, against charging upfront fees for “helping” businesses access the Coronavirus Business Interruption Loan Scheme (CBILS) after it emerged that some firms were charging up to £4,995 for advice on accessing support.
Mortgage Introducer has seen one site where firms associated with the UK bridging industry are charging fees of anywhere between £495 and £4,995 for advice on accessing the scheme and the submission of an application.
That site is also charging a 1% completion fee on any CBILS applications that are successful.
A HM Treasury spokesperson said: “Nobody should be charging upfront fees to businesses to access emergency loans designed to keep them afloat during the coronavirus outbreak.
“Nor should they be making misleading claims regarding their ability to help them access support.
“More than 50 accredited lenders are working round the clock to process applications, with 25,000 loans worth around £4.1bn already approved, and we advise visiting businesssupport.gov.uk or the British Business Bank website for details on how to access the scheme.”
CBILS was launched by Chancellor Rishi Sunak last month to offer loans to firms with a turnover of up to £45m.
Businesses can access the scheme through more than 50 approved lenders, with 80% of the loan guaranteed by the government.
The practice of charging fees for advice and submission has also attracted criticism from within the bridging finance fraternity.
Bridging finance specialist Phil Mabb of Bridgedevelopment Property Finance Limited said: “I’m one of a number of people to come across a glossy website put together by a bridging lender and broker purporting to be well placed to support those in need of assistance.
“Businesses across the UK are facing unprecedented operating challenges and the CBILS is designed to help those firms deal with these circumstances and keep people in jobs.
“Quite why these firms, and no doubt others like them, think this should be a fee-generating exercise is beyond me and frankly seems opportunistic and unscrupulous.
“The very people trying to access the scheme are those least able to afford to pay additional fees for it – especially when there is no guarantee of delivering a result.”
Earlier this week the Chancellor launched a new Bounce Back Loans programme for the UK’s smallest businesses.
Those firms will be able to access loans worth 25% of their turnover, up to £50,000, and the government will pay the interest for the first 12 months.