business loan illegal

CKhalvashi

Thrugelmir wrote: »

Never was an answer to the accountants advice given nor the over drawn directors current account. Probably for good reason.

Never ceases to amaze me the number of people who fail to seek advice before they set off. Only to find that they've dug themselves a hole. Then blame anyone else but themselves for what really is their own failings.

Unfortunately for OP, this is the bottom line.

I'll give a full answer for OP in few hours.

CK

dktreesea

Crystallady wrote: »

I used to work for the Corporate section of a bank though not Lloyds and from my experience I think you got close to the reason in post #30.
As a Business Relationship manager your manager was only able to sanction/agree business loans, he/she would not be able to agree personal loans and certainly not mortgages which are a regulated product.
As your Limited Company was no longer trading the chances were that you wouldn't have passed the lending criteria for a personal loan having little or no income, presumably you weren't taking a huge salary from the failing company.
She/he was probably trying to help you out - if the manager hadn't agreed the business loans how would you have found the monies needed ?

Yes, I have noticed this exact same phenomenon. At times the business will qualify for lending but we won't. Sometimes vice versa. Even though, for all intents and purposes the business and people involved are one and the same, and it's the same bank we are receiving both forms of finance through.

This seems to be an unintended consequence of having computers deciding whether to lend. Usually when you get onto a real person (the underwriter is good, because they seem to operate on both sides of the business fence, so to speak) they can get these kinds on anomolies sorted and provide you with an optimal solution.

amibeingrippedoff_2

robin3425 wrote: »

I joined this forum to see if anyone else shared my experience.
Most of you all seem quite happy to jump to conclusions, have I at any time said that I was looking to wriggle out of paying off the loans? I always have and always will. I thought that there might possibly be someone on this forum who would be able to actually focus on the question.
Looking at the number of posts some of you have made it makes me wonder if you haven't actually got anything better to do.
You all seem to suffer from the same delusion that you have some sort of God given right to make a moral judgement. It's not about what is fair it is about the law and the rules and regulations governing banking as they are. No more, no less.

Well said!

I have had same type of comments on these forums, some ppl are genuinely interested and have a heart to give their views and advice which did work for me.

it was because i listened to genuine replies and ignored the idiots i found that not only was a lender irresponsible by lending but there was much more behind the scenes and now its called FRAUD.

Ignore the idiots, if they were in your position it would be a different matter to them, thats for sure

Get professional advice, dig deep yourself in irresponsible lending and keep at it, it sounds like someone made a bit of commission by giving you what they knew they shouldnt have. if it was their own money they were lending you wouldnt be in your position.

All the best

Termfrog

I think the OP is more bothered about the fact the additional loan liability is in his name (sole trader) as opposed to being within the limited liability realm of his company. If his company goes bust, he personally, still has to foot the cost, vs the debt dying with the company.

As a ltd company, however, you can be struck off the directors list if you are believed to have planned to not pay the money back. In his case, I don't think ops intentions were malicious, but unlucky.

As others have suggested, seek legal advice.

Good luck.

londonTiger

yeah you need professional help, personal matters are straightforward but business matters are complex. I would imagine the banks would have they backs covered and they would not veer too far away from the law. Their training would ensure that they can get you to do stuff below the law without directly saying it - e.g. the mortgage brokers pre 2008 when they were encouraging people to state a higher income and not doing checks.

e.g. in personal banking it is illegal for them to suggest a parner or a relative to get a loan to help you repay yours, this is similar to what happened in your case as they asked you to open a non-limited entity to get a loan and to transfer that loan to limited company. It is quite complex and also a lot of the stuff that is illegal is b2c does not apply to b2b

londonTiger

Termfrog wrote: »

I think the OP is more bothered about the fact the additional loan liability is in his name (sole trader) as opposed to being within the limited liability realm of his company. If his company goes bust, he personally, still has to foot the cost, vs the debt dying with the company.

As a ltd company, however, you can be struck off the directors list if you are believed to have planned to not pay the money back. In his case, I don't think ops intentions were malicious, but unlucky.

As others have suggested, seek legal advice.

Good luck.

A lot of first time businesses would need to provide a personal guarantee for a business loan. E. G. A home as security, or business assets etc.

So it's not completely out of the ordinary to get guarantees outside of the limited company protection. But advising op to set up a sole trader account to get the loan was a low blow. Op should have been aware of the risks at the time of getting the loan.

I'll be watching this thread closely, good luck op, there's a chance that some rules were broken along the way somewhere so I hope you're able to get out of this muck.

pelirocco

Thrugelmir wrote: »

Never was an answer to the accountants advice given nor the over drawn directors current account. Probably for good reason.

Never ceases to amaze me the number of people who fail to seek advice before they set off. Only to find that they've dug themselves a hole. Then blame anyone else but themselves for what really is their own failings.

The overdrawn directors account is neither here nor there really

One of the drawbacks of running your own business ( apart from the obvious of keeping it afloat ! ) is that you can be to personally/emotionally involved and can be slow to recognise that you are flogging a deadhorse , its very difficult to make the decision to call it a day before it seriously starts to fail.
So i can understand why the OP probably bit the managers hand off when offered a loan . Hindsights a wonderful thing but getting the right business advice at the time would have been the way foreward , accountants dont necessarily provide this btw
I'm not sure why the bank lent the money to a made up business name rather then the correct one or even to your personally as the loan was secured . That would make me be suspicious that they knew if it went through the trading business it would be refused ? I didnt notice from when this dates from, as a business owner I am only to aware of the hoops you need to jump through when borrowing money ( and have had to do for some years now )

You have nothing to lose by getting some proper legal advice on this

pelirocco

londonTiger wrote: »

A lot of first time businesses would need to provide a personal guarantee for a business loan. E. G. A home as security, or business assets etc.

So it's not completely out of the ordinary to get guarantees outside of the limited company protection. But advising op to set up a sole trader account to get the loan was a low blow. Op should have been aware of the risks at the time of getting the loan.

I'll be watching this thread closely, good luck op, there's a chance that some rules were broken along the way somewhere so I hope you're able to get out of this muck.

Not just first time business's directors guarentees are becoming more common

I thought i was the only poster who felt there was something not right about the loan ( given the info we have )

londonTiger

pelirocco wrote: »

Not just first time business's directors guarentees are becoming more common

I thought i was the only poster who felt there was something not right about the loan ( given the info we have )

i too am a business owner, most of the posters probably aren't.

BillJones

pelirocco wrote: »

Not just first time business's directors guarentees are becoming more common

I thought i was the only poster who felt there was something not right about the loan ( given the info we have )

Even if there is something "not right", though, what help would that be? Should the OP want the loan cancelled, he already has that right, he just needs to pay back what he owes, and he can walk away. If a contract was void, either party can choose to put the other back in the situation in which they would have been had the contract not happened, and can walk away.

What is not going to happen is someone saying to the OP "Yes, that was ill-considered lending, why not just keep what was given, and let's say no more about it".