business loan illegal

londonTiger

BillJones wrote: »

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".

typical response from you.

If the loan was provided correctly it would be under the LTD company name and the loan is the responsibility of the folded company.

Your response is unhelpful at best, at worst it is trolling. OP should seek legal advice and try and see if there is an avenue to get the loan transferred to the correct entity which would absolve OP from the responsibiltiy of the repayment.

If financial products were missold the banks should be absolutely responsible for absorbing the hit from it.

BillJones

londonTiger wrote: »

Your response is unhelpful at best, at worst it is trolling.

Oh !!!!!!, grow up...

Even if it might have been better for the OP had it not been made as it was, that does not mean that it will be written off. Stating the facts is not trolling.

Yes, I "typically" go with what is going to happen, not with what the OP might want to hear. Even if rules were broken, I've stated what the likely recourse is, and it is not going to be that the OP gets to avoid paying back the loan.

londonTiger

OP don't listen to this idiot above. He's just here to kick someone down. Do seek legal advice and find out if the banks decision to lend to a ghost company was lawful or not. If it was unlawful you might be able to take this to court and get the loan reassigned to ltd company.

They had full knowledge that you intended to transfer the money into the limited company. Presumably you applied for a loan for the limited company and the sales rep talked you into creating a shell business out of thin air just for the sake of facilitating the approval of a loan. Really dodgy ground here.

They knew what they were doing, and they inte tionally misled you. They would not have lent to this shell business on its own merit either. Which bank is going to lend to an unincorporated business with no trading history, no business plan, no documents what so ever!

That should be enough to prove to any adjudicator that the bank lent to the shell business purely to facilitate the approval of the loan and they had full knowledge that you were going to transfer the funds for ltd company use.

jonesMUFCforever

londonTiger wrote: »

OP don't listen to this idiot above. He's just here to kick someone down. Do seek legal advice and find out if the banks decision to lend to a ghost company was lawful or not. If it was unlawful you might be able to take this to court and get the loan reassigned to ltd company.

It takes 2 sides to enter into a contract - if the bank have done something illegal (I don't think that they have) do you think in court that they will just lie down and say nothing about the company directors accepting the loan? Is that also not illegal?

londonTiger

jonesMUFCforever wrote: »

It takes 2 sides to enter into a contract - if the bank have done something illegal (I don't think that they have) do you think in court that they will just lie down and say nothing about the company directors accepting the loan? Is that also not illegal?

Lenders have to be licensed to lend money, borrowers dont need to be licensed to walk into a bank and get a loan. There's all sorts of laws designed to protect borrowers from being conned and get into unfair borrowing agreements.

The onus to be complaint with the law lies squarely with the lender.

let me ask you this. If you got ripped off and bought a broken telly from [insert high street retailer], and they knew it was broken when they sold it. They would have broken the law. Now as a buyer have you broken the law with them and therefore lose your right to your money back? Because that's what you just suggested.

This is the point at which MSE threads just get !!!!!! and people just post random comments without thinking it through.

Thrugelmir

londonTiger wrote: »

Lenders have to be licensed to lend money, borrowers dont need to be licensed to walk into a bank and get a loan. There's all sorts of laws designed to protect borrowers from being conned and get into unfair borrowing agreements.

Business owners are deemed to either know what they are doing or to seek independent advice. Directors personal guarantees are nothing new. In fact as old as the hills. Normally requested as there's no Company assets, property, machinery, debtors on which to place a security charge.

DevCoder

londonTiger wrote: »

Lenders have to be licensed to lend money, borrowers dont need to be licensed to walk into a bank and get a loan. There's all sorts of laws designed to protect borrowers from being conned and get into unfair borrowing agreements.

The onus to be complaint with the law lies squarely with the lender.

let me ask you this. If you got ripped off and bought a broken telly from [insert high street retailer], and they knew it was broken when they sold it. They would have broken the law. Now as a buyer have you broken the law with them and therefore lose your right to your money back? Because that's what you just suggested.

This is the point at which MSE threads just get !!!!!! and people just post random comments without thinking it through.

Your analogy is inaccurate as it implies only one half is in the wrong.

In this case, the OP had reasonable cause to suspect that what was happening was not totally correct. However even with that understanding they proceeded into the contract.

Business "owners" are assumed (in a court of law) to have a knowledge above and beyond that of a normal lay person. The same applies (for example) for consumer rights which dont apply in a b2b transaction.

Therefore a court of law would question why the business owner did not raise concerns that (s)he should be fully au fait with. This is where a number of business "owners" come unstuck, and equal blame/liability is often the resultant outcome.

Antimoron

londonTiger wrote: »

OP don't listen to this idiot above. He's just here to kick someone down. Do seek legal advice and find out if the banks decision to lend to a ghost company was lawful or not. If it was unlawful you might be able to take this to court and get the loan reassigned to ltd company.

They had full knowledge that you intended to transfer the money into the limited company. Presumably you applied for a loan for the limited company and the sales rep talked you into creating a shell business out of thin air just for the sake of facilitating the approval of a loan. Really dodgy ground here.

They knew what they were doing, and they inte tionally misled you. They would not have lent to this shell business on its own merit either. Which bank is going to lend to an unincorporated business with no trading history, no business plan, no documents what so ever!

That should be enough to prove to any adjudicator that the bank lent to the shell business purely to facilitate the approval of the loan and they had full knowledge that you were going to transfer the funds for ltd company use.

You're making incredibly wild assumptions.

You keep pushing the falsehood that the bank advised him to do the dodgy thing he did - when I've re-read the original post and it says no such thing. Infact it implies that his business manager suggested it.

You're blindly supporting OP because you feel aggrieved by the system towards business owners like yourself in getting finance.

Well I can tell you the OP is getting no where with this. There is nothing remotely illegal here and rest assured if he had been able to weasel of out of it, he'd be back here singing about it.

And I too think your TV analogy makes zero sense and is at best a false equivalent. Buying a TV, a sales agreement is in no way the same as entering a lending contract.

You're making yourself look silly trying to push for this one when it is plain as day what is going on here.

I especially love how the OP listed 3 reasons why he thinks the loan should be illegal - like any of that matters to agreement he entered.

tonyE1

It is not necessarily the case that you cannot claim tax relief for the interest on the loan taken to finance the business.

From http://www.hmrc.gov.uk/manuals/saimmanual/saim10210.htm

ITA07/S392 gives relief for interest paid on a loan applied:

... in lending money to a company, which is used wholly and exclusively for the purposes of its business ...

There are caveats but it would be much simpler and quicker for you if you were to explain everything to someone who can ask you questions in a more efficient way.

Your case is too complicated to resolve on a forum but you might consider contacting these people http://www.taxvol.org.uk/

Having such a large loan outstanding as you reach retirement cannot be easy. Good Luck.

BillJones

Thrugelmir wrote: »

Business owners are deemed to either know what they are doing or to seek independent advice. Directors personal guarantees are nothing new. In fact as old as the hills. Normally requested as there's no Company assets, property, machinery, debtors on which to place a security charge.

Best not confuse him with the facts. He knows how he'd like things to be, and if you instead prefer your advice to be reality based, then you are an idiot or a troll, apparently.

But yes, a business entering into a deal is given only minimal protection in law compared to that given to an individual. This belief that the bank has a responsibility to assess suitability and appropriateness on a non-advised business loan is not correct.