Tide Responds to Customer Reaction to Bounce Back Loans
Merchant bank startup Tide faces backlash among customers after it suspended Bounce Back loans and left thousands of small businesses in deep trouble.
Thousands of businesses are signing up to Tide’s waiting list for government-backed COVID support loans after they launched in May. However, Tide was forced to suspend loans earlier this month after running out of cash.
The suspension has left many customers surprised and angry. A petition claiming that businesses “were suffering unnecessarily” as a result of Tide’s management of the program has garnered nearly 1,000 signatures.
“They broke their promises,” Tide client Sri Murthy told Yahoo Finance UK.
Tide maintains that it was clear with customers from the start that it might not be able to meet all of the demand for Bounce Back. The company said it was sorry some customers were angry, but defended its management of the program.
Bounce back from the funding crisis
The government launched Bounce Back loans in May to help smaller businesses in the UK pay the bills during the COVID-19 shutdown. Businesses can borrow up to £ 50,000 ($ 63,489) from participating lenders at a rate of just 2.5%, with a 100% state guarantee on the loans.
Tide, which has 200,000 UK customers, was authorized to offer Bounce Back loans in May and lent £ 50million in the first month.
Tide is not a bank, and unlike other Bounce Back lenders, it has raised funds to lend by borrowing on its own. He was forced to put Bounce Back loans on hold earlier this month after funding ran out.
“I was devastated because I had high hopes,” Murthy told Yahoo Finance UK.
He signed up with Tide in May in hopes of getting a Bounce Back loan. Murthy runs an Indian restaurant, The Spice Gallery, in Bridgwater and needed money to pay rent and staff.
“They affected me a lot,” he said. “They kept me in limbo for two months. I would have done something else.
“Even the day they sent the email to stop funding, in the morning I chatted with one of the team members through the app and they said we were reviewing it, don’t do not worry.”
A spokesperson for Tide said: “We are sorry the member is feeling this way as we understand how difficult this crisis has been.”
But the spokesperson added that it was “clear in our communications (…) that we could not guarantee that we would be able to provide a Bounce Back loan to everyone who joined the list of ‘waiting”.
“We know that’s not what people wanted to hear, but it was communicated constantly,” the spokesperson said.
“They misled people”
Murthy is not alone.
“I don’t understand why these are the only ones that seem to be going nowhere,” Richard, a recruiter from Dorset, told Yahoo Finance UK.
“The Starling Bank hasn’t run out of money, has it? Metro Bank did not run out of money. I’ve been asking from the start, is it because you can’t get the money? They have never said.
Customers have taken to social media to express their frustration. A Twitter account called “Tide Bounce Back Loan Experiences” accused the company of using the “Program as a marketing opportunity”. Users of a Facebook group called “Tide Banking Customers” said the company was a “mess” and expressed his frustration with the way he handled Bounce Back loans.
“I think so much that they misled people,” said Richard.
“I am now sitting here with rent arrears, it was really hard to put food on the table, it made life as a couple difficult. (Richard asked Yahoo Finance UK to retain his second name for personal reasons.)
Many customers are particularly unhappy that Tide offered Bounce Back loans to new customers before existing ones.
“I asked the question: have you made loans to people who were not Tide customers before? Richard said, “They said yes, we did.”
“I had been ignored on new business. I thought I was at the top of the list. It’s wrong. They chose new businesses over existing businesses.
A petition on Change.org was launched a month ago calling for Tide to stop accepting new customers until it has satisfied the demand for Bounce Back loans among existing customers.
The petition said small businesses were “suffering needlessly” as Tide “transformed the [Bounce Back Lending] BBL scheme in a lottery. The petition has collected nearly 1,000 signatures.
“We dispute the charge that we have turned the BBLS into a lottery,” said a spokesperson for Tide. “We have opened a waiting list and offered BBLs to eligible companies on this list on a first come, first served basis.”
The spokesperson denied that Tide used the Bounce Back loans as a marketing opportunity and said any new business registrations were just a “side effect” of the program.
“We are taking members’ comments into account and understand that there was some confusion around the waiting list, which we will certainly learn from,” said the spokesperson.
The backlash is especially embarrassing as Tide is now asking customers for help saving their Bounce Back program. Tide wants the government to step in and fund its Bounce Back loans directly. Earlier this month he published an email template to send to MPs on his blog and urged customers to help.
“We have done our best and communicated openly with our members,” said the spokesperson for Tide. “We fully share the frustration of many that the government has yet to decide to provide the required funding with the program. We are ready to resume lending through BBLS if the government decides to provide such funding. “
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