Business Banking startup Tide is facing a backlash from its customers after the firm suspended its bounce back loans offering.
After the government-backed support loans were launched in May, Tide had thousands of companies sign up to their waiting list. Now however, the firm has suspended loaning after running out of money; leaving thousands of small businesses across the country in the lurch.
Tide’s decision to suspend loaning has led many customers to feel surprised and angry with almost 1000 people signing a petition claiming businesses are “suffering unnecessarily” as a result of Tide’s actions.
Whilst the startup has faced backlash and criticism over its handling of the programme, Tide has argued that they clearly told customers at the start of the programme that they might not be able to satisfy all Bounce Back demand. The company did apologise to customers who felt angry but continues to defend its handling of the programme.
Bounce Back loans were launched by the UK government back in May as a way of helping some of the country’s smallest businesses to pay the bills during the coronavirus pandemic. Firms have the opportunity to borrow up to £50,000 from lenders who are participating in the scheme at a rate of 2.5%, with a 100% state guarantee on the loans.
Tide has 200,000 UK customers and was approved to offer bounce back loans in May, lending out £50 million in the first month. However, unlike other bounce back lenders, Tide is not a bank and instead had to raise the cash to lend by borrowing itself. After the funding ran dry and they were seemingly unable to raise more money from investors, the business banking firm was forced to suspend their bounce back lending programme.