Higher Declines due to Bounce-Back Loan
Whilst the government has provided quite a few different schemes due to the Covid-19 pandemic such as the bounce-back loans and payment breaks, we’re seeing a huge increase of finance declines for businesses who have taken up on the offers.
Why are they declining?
We’re not totally sure the reasoning behind the declines, however, as the loan still sits as a future liability our experienced underwriters have said this could be due to the higher risks associated with repaying this loan.
We’re all aware of the fraudulent claims for the bounce-back loans that have been processed over the previous months, with even dormant companies still managing to gain access to these funds, with little or no effort as the government guarantees these loans.
Mike, our experienced underwriter says “Many of the finance houses are looking at the payment breaks and the bounce-back loans that the company could be volatile and thats the reason why the company has opted to go down this rate.
“Many accountancy firms have pushed their clients to actually take this route as its a cheap rate of finance, but this has caused more harm than good.”
Many of the brokers I speak to with similar businesses have said that even by spread betting proposals across multiple funding houses, it hasn’t resulted back in many positives.
Mike also explains that this can also have a negative impact on your credit scores, the more credit checks carried out, the less likely you are to be accepted.
Short-Term Car Lease route
Another option is to apply for a credit line with Cocoon Vehicles and take a short-term vehicle. This can be on a fixed or a flexible basis and we have a huge range of vehicles on both programs.
Its really easy to get an account open and you can apply online within 5 minutes. Our underwriting team will then request documents and information to comply with anti-money laundering regulations and compliance.
Depending on the history of your business or personal circumstances, you may be restricted to a credit limit or certain funders and/or suppliers.
Once you’ve ran the car for a few months, you can request a credit limit or account review for renewed terms. When you think you’re ready for long-term, you can then take advantage of our Find a Car Lease service.
If you would like any further information about any of our product and services, then please get in touch with the Cocoon Vehicles team on 01332 290173 or complete the online form below.