Old enterprise loan

Sean91

Hi all

Not sure if this is the correct place to post pretty new to forums.

I got a enterprise loan back when I was 20 I'm 25 now business failed and I have been struggling to pay it back ever since.

It was classed as a personal loan so the debt stays with me not the business.

When I got the loan I was desperate for any money I could get to try and make a go at the business my credit rating was very poor I was rushed through the process initially given £1500 then the people rang me offering me another £3500 it all felt very rushed and the enterprise centre that where helping me just wanted me to get the money regardless even after I had told them I have really bad credit I was also in arrears with other loans etc.

I know it's my own fault for signing for it but I was young and dumb spent the money then the business eventually failed and I could no longer make re payments.

I have been setting temporary arrangements up for the last 3 years or so, I feel I should never of been given the money due to my status.

Any advice is truly appreciated arrangement is coming to an end and I really don't know what to do I just want rid of the debt.

Thank you

Sean

sourcrates

Hi,

From what i read, these type of business loans where 75% guaranteed by the Government, in case of default by the borrower.

So although you remain 100% liable for the debt, once the DCA/Creditor whoever, has gone through the motions of debt recovery with you, they will still get that 75% of the money back via this government guarantee.

Did you have to provide any security for the loan at all ?

Sean91

I did not have to provide anything in terms of security.

I was just told it was classed as a personal loan.

I only had to provide my business plan in order to go through the process.

Thank you for your reply

sourcrates

In that case you should propose a payment of whatever you can afford.

They can't take what you haven't got.

Sean91

If in future I do default after debt recovery etc will I only owe £1250 if the government cover 75% of the loan?

Also am I in any sort of position to dispute the fact of how poor my credit was I should of never been given the loan?

January2015

Sean91 wrote: »

If in future I do default after debt recovery etc will I only owe £1250 if the government cover 75% of the loan?

Also am I in any sort of position to dispute the fact of how poor my credit was I should of never been given the loan?

You will always be responsible for the full balance, i.e. 100% of the loan.

There was a sort of mis-selling scandal attached to some enterprise loans sold by RBS - see this article. I haven't heard that any other banks made similar errors when providing enterprise loans to customers to though. However, what that article does make clear is that "It was only when RBS notified them of their default that some of the borrowers realised that they were responsible for 100% of the EFG facility"

EFG is Enterprise Finance Guarantee.

Sean91

Thanks for your response,

I was not given the loan by a bank it was a agency called five lamps that was handling enterprise loans.

I had to do workshops etc before I got the loan.

I had a mentor who then applied to five lamps on my behalf etc - it is this mentor who contacted me offering more money also not the loan organisation.

harrys_dad

Five lamps is still in business it seems. Have you considered complaining about misselling? Not sire what that would achieve but what have you got to lose. Their complaints form can be found on this page:

http://www.fivelamps.org.uk/about/customer-feedback/

sourcrates

Sean91 wrote: »

Thanks for your response,

I was not given the loan by a bank it was a agency called five lamps that was handling enterprise loans.

I had to do workshops etc before I got the loan.

I had a mentor who then applied to five lamps on my behalf etc - it is this mentor who contacted me offering more money also not the loan organisation.

Mentor ?, in this case i would assume he was a broker of some kind, who got paid a commission for getting new business from you.

From my experience of brokers, i can tell you honesty was not their no 1 priority.

I once used a broker company to obtain a secured loan for me (back when i was stupid and inexperienced) they, shall i say, "exaggerated" my income by almost twice as much again, in order for me to obtain the loan, as there were no checks on affordability, just what was on the application form.

Me being naive and stupid, accepted what they had put without question, i recon this kind of practice was widespread at the time.
It cant hurt you to pursue a complaint for mis-selling, who knows you may get a good result from it.

January2015

Five lamps is a registered charity and from what I can see on their website, the OP would have had to attend workshops and would have had a mentor to help him through his business plans and make application(s) for finance. The enterprise loans seem to be part of the government initiative - their loans section states "Five Lamps is the local delivery partner for Start Up Loans, a government backed national initiative aimed at motivated individuals who are yet to launch their own business or those who have been trading for up to 12 months, although in certain circumstances this may be extended to 24 months."

However, regardless of whether the loan was backed by the government or not, the OP will still be liable for the whole amount. As to whether there was any mis-selling or not, I have no idea.

Sean91

Thank you for your replies.

It has now been handed over to a company called Business finance solutions.

There where no checks at all on affordability no plan b if the business did fail just a spreadsheet which they created for me with projections on what I would make in the first year which did not happen.

I accepted the loan but did not expect it to fail as fast as it did, so now the debt remains with no real help afterwards it just doesn't seem okay to me.

I also told the mentor repeatedly that I had really bad credit and had already defaulted on other arrangements I had, I just got told this will be okay etc.