problem with bank over a business loan

scc_southport

hi i am having a problem with my bank over a business loan, it was taken out by my old company, i have never missed a payment, never late i have made overpayments so i can never be in areas,
it started when myself and business partner took out a loan for our company, but after about 18 months we went our seperate ways, not through any fallout just had other work commitments, i took over 100% and then changed the name of company and then set up my new company up though company house, i took over the loan from the original company because i gauranteed the loan so for the past 10 months i have paid without any problems,
then the bank started to send me letters to say they are closing my bank accounts without any reason, after several phone calls later i find it is down to this loan, i have beentold that i must pay the loan in full or lose my bank accounts,
i have asked for a copy of the loan agreement by phone and through post, i have asked for a reason for the loan to be paid, as said earlier never missed or late with payment. they are now taking away my business accounts and my merchant account [card services] saying this is down to the adverse data in evidence on my existing bank account.

can anyone advise
john

[Deleted User]

try and get a meeting with an area manager with the bank,the best way in my exp.to do that is speak to the chairmans secetary.(cant beat going right to the top to get some action)

scc_southport

hy thank you for reply
my main problem i think is with my business manager, they claim they cannot do anything about it but when i contact the bank they say all the information is going to my business manager, they want me to take out a loan to pay the loan, but as said in earlier message they are trying to close down all avenues for me to be able to pay my monthly payments,
they say because old business is gone that i have defaulted and must pay in full now.
john

jonesMUFCforever

By company do you mean Limited company.
If so you just can't just change the name and everything else turns out dandy - you would have had to open a new account in the new name and close down the old ltd company name (including loan) so I can see where the bank is coming from.

scc_southport

thanks for your reply,
i agree if the business fails all debts should be paid, but when you ask your bank who you have the business account with their advice and the business manager suggests you need to take the link from your ex business partner [security reasons to stop any further loans or any thing taken out through old business ], so they suggested i change the registered company and open up a new business account and keep the old account open and continue to pay the loan through that account, they even rang me every month to remind me to make sure i had money in the old account to keep the payments upto date
we are in the same bank with the same business manager same premises we had no debts [exept loan]

owner

When you close a Ltd company the business bank accounts are frozen, is this what has happened ? If so then it sounds like you were wrongly advised by the business manager.

scc_southport

yesmy old ltd business account was frozen about 4 months after i transfered to the new business account but they still accepted payments from ny personal account and now through my current business account, i have told them i have no problems with paying but not all at once,

jonesMUFCforever

But if the limited company has been struck off then legally it does not exist so they are right to call in the money.
If you cannot afford to repay all at once why not organise a new loan assuming you are still trading profitably.

scc_southport

still trading, making a profit, bank say i have an overdraft facilty for £10,000 with the same bank with my business account and i have never even gone into it because my business has a good turnover, i have a credit card though the same account and use it now and again but pay up in full every month.
i have enough available cash if i used overdraft without leaving my business scratching around for its next penny but the bank says i can not use overdraft to pay my other business loan, but i can use it to buy stock or what ever the business needs,
they will give me a personal loan to pay the loan but will not allow me to transfer the loan to myself even though i have gauranteed the original loan

housebuyer_abc

scc_southport wrote: »

still trading, making a profit, bank say i have an overdraft facilty for £10,000 with the same bank with my business account and i have never even gone into it because my business has a good turnover, i have a credit card though the same account and use it now and again but pay up in full every month.
i have enough available cash if i used overdraft without leaving my business scratching around for its next penny but the bank says i can not use overdraft to pay my other business loan, but i can use it to buy stock or what ever the business needs,
they will give me a personal loan to pay the loan but will not allow me to transfer the loan to myself even though i have gauranteed the original loan

Your new company can't pay your old companies loan. I'm assuming you don't have an accountant - he would never have allowed this.

Basically (although I know you never set out to do this) what you are doing amounts to money-laundering and fraud.

The new LTD company does not have the loan its name yet you are using capital from it to fund the loan, and no doubt taking that as an expense to the company and hence not paying tax on it. This can't be done. Its not a company expense so to draw the money out for this purpose it would need to first be paid to you as salary (with all the NI and tax issues).

The best thing here is to get the account closed (as the old business is closed) and talk to the bank about transferring it into a personal loan that you can then pay from your own income drawn (legitimately via PAYE or dividends) down.

The reason they'll let you pay with the companies money but not the overdraft is that technically you own the credit balance so can do what you want with it (the tax man can come for his bit later - the bank doesn't care about this); however the overdraft is theirs, and they won't let you clear the liabilities of another entity with their cash.

Go and tlak to an accountant explain the things you've done and get this sorted out now while it's still manageable. Then think about complaining to the bank once its dealt with

scc_southport

Hi thanks for your reply, i have been paying loan from my own personal money, but with the bank demanding it all now i was not sure if i could do it from my business, i still have cellers full of the old stock from last company [ when we closed the company it was free of debt except for loan ] i went personal gaurantee so still paying loan, but thought i could clear loan by buying from old company to the new this would clear loan and allow new company to sell stock, not trying to get out of paying loan because a loan is a loan, just want to do it all legal