Advertising feature from Tudor Lodge Consultants

The Bounce Back Loan Scheme saw more than £44 billion worth of loans distributed to 1.1 million small businesses and individuals to help struggling UK businesses cope with the financial challenges of the pandemic. The UK government partnered with high street and participating banks to distribute the loans, offering 100 per cent guarantees on the payment of this scheme, allowing borrowers to apply for up to £50,000 with very light checks and often lightning funds available on the same day. However, with incredibly favourable rates, including no interest in the first year, it has emerged two years later that a large sum of the money borrowed was lost to fraudsters. In fact, data shows that 10 per cent of all loans taken out were some kind of fraud, amounting to £4.

The buy now pay later industry has exploded in recent years, with the industry now worth $100 billion (circa £70 billion). Also known as BNPL, it is used by shoppers to delay payments on any kind of product from champagne to clothes and kitchens, and the option to pay nothing today and repay over 12 months in instalments or one lump sum, either interest-free or a little interest on top. While the Financial Conduct Authority requires anyone offering consumer credit to be authorised, this is not currently the case with BNPL. The industry remains unregulated if customers make no more than 12 payments within 12 months or less and many other businesses are able to use this exemption including invoice financing, season tickets and white goods.