Did the contact stop — and then a default appear from nowhere?

The two organisations involved

Complaints about how your account was managed should be directed to GC Business Finance in the first instance. Concerns about the programme overall can be escalated to the British Business Bank or your MP.

What Borrowers Are Reporting

A pattern has emerged among some Start Up Loan borrowers, particularly those whose loans were taken out in the period before and during the Covid pandemic:

• Little or no contact from GC Business Finance for an extended period — in some cases years
• No arrears letters, no payment reminders, no phone calls
• A sudden default notice or demand for payment arriving without prior warning
• In some cases, the default appearing on a credit file before the borrower was even aware of the situation
• In some cases, a confusing "State Aid" email received during or after the Covid period — which some borrowers understood as meaning their loan had been resolved or written off. It had not.

What the confirmed timeline looks like

For at least some borrowers in the 2020 cohort, the sequence is now well documented:

1. Loan taken out and direct debit set up in 2020
2. No payments were collected by GC under the direct debit — and no contact was made about this.
3. A confusing email referencing State Aid was received — in some cases this was interpreted as confirmation the loan had been resolved.
4. Years of silence followed — no arrears letters, no statements, no contact.
5. In late 2024, backdated regulatory letters were issued — correspondence bearing earlier dates, sent as though to regularise the account retrospectively.
6. In 2025, a new default was placed on the credit file without prior warning — in some cases putting employment in regulated sectors directly at risk.

Why This Matters

A default is not a minor administrative event. It can have serious, lasting consequences:

What the Rules Say

Before a lender can issue a default, they are required to:

• Make reasonable efforts to contact you and give you an opportunity to address the situation
• Send a formal default notice giving you at least 14 days to respond
• Follow their own internal arrears and forbearance procedures

What "reasonable attempts to contact" means

Regulators and courts consider a number of factors when assessing whether a lender made reasonable contact attempts. These include: the number of contact attempts made, the channels used (post, email, phone), whether the lender had up-to-date contact details, and the time that passed between attempts.

Years of silence, followed by a sudden default with no prior warning, is unlikely to meet this standard.

The Remediation Project

Some borrowers in this cohort have received letters from GC Business Finance referring to a remediation project. If you received such a letter, this may indicate that the lender has identified issues with how a group of accounts was managed.

See The Remediation Issue page for more information →

What You Can Do

If you were defaulted without proper notice or after a long period of no contact, take these steps:

1. Submit a Subject Access Request immediately to obtain all records held about your account. This is free, takes effect from the date submitted, and must be responded to within 30 days. See Know Your Rights for how to do this.
2. Request a full account history including all contact attempts, communications, and notes. This will establish whether the lender made reasonable efforts to contact you.
3. Check your credit file for the default and when it was registered. You can do this free of charge at Experian, Equifax, and TransUnion. Note the exact date of registration.
4. Write a formal complaint to GC Business Finance's complaints team, clearly stating the timeline of events and asserting that proper process was not followed. Ask for the default to be removed.
5. See Your Routes If Things Go Wrong for escalation options if your complaint is not resolved satisfactorily.