The Association noted with interest the article published in Tuesday’s Daily Mail, regarding firms struggling to secure emergency loans under the CBILS initiative being warned to ‘steer clear’ of brokers charging to ‘fast track’ CBILS applications.
We wish to highlight that the article includes several statements that are not true.
- The NACFB does not condone our Members charging upfront commitment fees that are non- refundable
- The NACFB does not recommend a 3% fee for CBILS facilities, or indeed for other facilities
- The NACFB has issued clear guidance to our Members prior to this report that it is not appropriate to profiteer from the COVID-19 pandemic
We made an official statement to the journalist on Monday, which also clarified these points, but he elected not to use any of our comments in their sensationalist report.
The reality of the situation is that many small businesses are not equipped to provide the detailed information the vast majority of CBILS providers request in order to provide funding. These small businesses need the services of professional advisors in order to access CBILS. Some may choose to pay an accountant to assist but many ask for assistance from their financial intermediary.
The NACFB expects all Members to charge what would, upon detailed scrutiny, be adjudged by ‘a reasonable person’ as fair and justifiable; in both the context of the crisis itself and the nature, size and complexity of any case submitted to lenders under CBILS. The Association also advises that each Member retains evidence of the work they have undertaken, should their fees ever be challenged in the future.
The Association has a clear Code of Conduct, and a rigorous independent complaints procedure. Any Member reported to be acting inappropriately will be investigated and the NACFB will take appropriate action based on the results of that investigation. We are not the market regulator but do hold our Members to account for complying with our professional Code of Conduct.
Regarding the ‘fast tracking’ of applications, the Association does not condone financial promotions that are factually incorrect or cannot be substantiated. However, certain Members do have the ability to circumvent some funders’ standard processing channels potentially saving time. Again, any complaint in relation to incorrect promotional statements would be investigated and dealt with.
Of course, our Members operate in a free, competitive market environment and are required to provide the customer with the information they need to make an informed decision. Any customer can choose to accept or decline the terms of business presented by a broker and can go elsewhere for professional advice if they choose.
As a long-standing partner of the British Business Bank, the NACFB has enjoyed an active and constructive dialogue, providing frontline feedback that has helped to steer the CBILS initiative. This has resulted in the implementation of measures that have increased market liquidity.
We look forward to maintaining this dialogue but wish to do so with the role of the intermediary still viewed as both a viable and legitimate route to market.