business loan illegal

BillJones

Antimoron wrote: »

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

I think that you've hit the nail on the head here. Londontiger seems positively aggrieved that the world of finance has not treated him how he feels he should be treated, and so wants to now take the "little guy"'s side in any dispute.

He seems to fundamentally not understand the nature of a business to business contract, especially with regards to the fact that the law cares very little about the relative size of the two companies involved in the deal.

This is not a minor point on this issue, it goes to the heart of it. What we seem to have is that the OP was desperate for any short-term solution, that he took what was offered, but that he now does not want to be held liable for his own business's failings, and expects the bank(which helpfully gave him a lifeline) to bear responsibility.

The bank, from what has been written, bears no responsibility at all in this case.

londonTiger

Antimoron wrote: »

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.

I was under the impression that business manager = business banking manager at the bank. I thought OP was the owner/manager of the business.

I fully understand that business manager usually means an internal manager but the way OP was argueing and the illegality of it all I just assumed he means his account manager at the bank.

case in point.

robin3425 wrote: »

The company carried on losing money and in 2009 after speaking to my new manager she said all she could do was to give a new loan to the non existent business which would again clear the previous loan and overdraft. After that the bank would not lend anymore. In 2013 the company was wound up for £30,000.

Regarding wild assumptions. I am making assumptions but I wouldn't say incredibly wild. It would be logical to assume that OP went to the bank to get funding for his limited company and at some stage the bank said "sorry we can't give you a loan to your company because xyz, but we'd be happy to provide you with a sole trader loan"

I think upon reflection the fact that the bank refused to give the OP a personal loan and gave him a sole trader loan suggests they knew they couldn't lawfully give someone a personal loan for business use.

The wild assumption here is it could be argued that given there's no trading history, business plan or anything else for this business- it was purely set up on the fly to push the loan application through and bank knew the money was for the ltd company ultimately because the discussion of what the money is used for always takes place.

londonTiger

edit: fed the troll, then retracted

londonTiger

krisdorey wrote: »

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.

Yep fully accept that businesses have a higher duty of responsibility with these things. But what's there to lose when you have 80K debt hanging over you. Which the bank should never had lent?

At worst you lose £1grand to a solicitor to look into this. At best you get a large proportion of this written off as it gets reassigned to ltd company.

Most likely scenario is that there is a middle ground where before it goes to court the bank accepts they were complicit in application fraud and decide to cut a big load off the loan on reduce interest to 0%

One of my friends who owns a business got his rug pulled from under him after 2008 and bank called in the loan in full. He didn't pay it as he had no means to repay everything at once. But he was making regular repayments up til then. The loan agreement has a clause which says that if you're late with paying any other bills that's grounds to call the loan in fully. Paid the business rates late and bank wanted everything repaid in full.

Debt was sold to a debt management company by bank. Debt management company bought it on the cheap so after negotation offered 0% interest on the remaining balance so effectively got a reduction of his entitlement.

All he did was negotiate and talk to them. If OP just sits on his !!!! and just pays this debt the bank is only going to be happy. OP needs a solicitor who deals with these financial affairs to advise him, and find ammunition to negotiate or take to court with. A free consultation with a solicitor who deals with these will be able to tell you within 30 minutes whether this is winnable or not.

londonTiger

OP if you do seek out solictors do get 2nd and 3rd opinion on several other solicitors. It makes me think you've made quite a few mistakes along the way and it didn't work out. Don't get trapped into the legal game and rack up more debts.

Get the green light from several solicitors as to whether you have a winnable case. Of course if any offers you a no win no fee then bit the offer from his/her hands.