BBL application - Partnership

Funqi

As I understand it, this is worked out on your 2018-2019 turnover, at which time, myself and my brother were a partnership. However, since 6th April 2019, we have both been sole traders. Although we do still regularly work together & use the same name and actually the same business account as we always have, we also work separately, as we live 100 miles apart, so we just invoice each other on the jobs we do together.

Our turnover in 2018-2019 was 74k. I'd like to be able to use the BBL to repay debts on credit cards that I used to keep us going when we had a really terrible time a few years ago, I've been getting on top of them quite well lately, but still 10k left to repay. I've never been able to obtain a loan to consolidate them, so if I can replace them with a BBL, it'll give me a real chance to manage so much better and hopefully get out of debt sooner, now that we are back at work, but am I eligable now?

Jeremy535897

Your application would be based on your turnover for 2019/20, rather than your share of turnover for 2018/19, but there is no reason why breaking the partnership from 6 April 2019 would stop you applying.

Funqi

Thanks Jeremy,

Although I haven't submitted my 2019-2020 returns yet, will they just look at the money that went into my account for that period?

I don't have my own business account now though, just my personal account with HSBC, although the Barclays account we have always used since we started is still a joint account, so not sure who best to apply to. Maybe he applies to Barclays & I apply to HSBC?

Jeremy535897

I haven't applied for one myself, and there are lots of threads on here about the problems with various banks. The obvious thing to do would be to apply to Barclays for a loan based on your joint turnover. The trouble is that you have said this is no longer a business in existence, so that's not an option. Do Barclays even know? Does HMRC know you are no longer in partnership? You can share partnership profits however you like, if one of you works more than the other, but you remain jointly and severally liable for partnership debts, and taking out a loan jointly means you will both be responsible for it, but getting a loan each with no individual business bank account and no financial accounts will be much harder.

Funqi

Thanks Jeremy,

He made the application to barclays through the mobile app. He made the application on friday and the money was in the bank on the monday. He used the figures just for his own turnover from 2019-2020.

Not so easy for me though. I applied the same day and did the same thing with HSBC. I had to upload my tax return for 2018-2019 to prove what I paid, but of course, during that time, we were a partnership. They refused me and said it is because either I will need to open a business account for them to deposit the loan into, or because I have a loan already. I'll call them and find out which one it is. It maybe because the barclays account still has me as a joint holder, in which case, we probably could have gone for 25% of our joint turnover as a partnership. I was trying to do the right thing, but maybe shot myself in the foot now.

Jeremy535897

Funqi said:

Thanks Jeremy,

He made the application to barclays through the mobile app. He made the application on friday and the money was in the bank on the monday. He used the figures just for his own turnover from 2019-2020.

Not so easy for me though. I applied the same day and did the same thing with HSBC. I had to upload my tax return for 2018-2019 to prove what I paid, but of course, during that time, we were a partnership. They refused me and said it is because either I will need to open a business account for them to deposit the loan into, or because I have a loan already. I'll call them and find out which one it is. It maybe because the barclays account still has me as a joint holder, in which case, we probably could have gone for 25% of our joint turnover as a partnership. I was trying to do the right thing, but maybe shot myself in the foot now.

Your brother has effectively used up your joint application. You will have to explain that you now have your own separate business, and will use your own turnover for 2019/20. Unfortunately they may not believe your story, unless you have evidence. You may also potentially be liable in respect of the loan Barclays has made that has gone into the joint account. I'm surprised your signature wasn't required.

Funqi

As it turns out, his application has not affected my application. I called HSBC and they said they have recieved my tax return & proof of earnings and need to set up a feeder account for me, because I only have a personal account with them. They said they will email me when it's ready and transfer the funds into that, then I can move it into my personal account. That was about 3 weeks ago now and I've not heard a peep out of them, and reading on here, it seems that is quite typical for HSBC. Then even if/when they do put it into the feeder account, it's another job to get it out.

Wondering if I should call them and cancel the application and apply to another bank?

Grumpy_chap

Just call them for a progress update.  Cancelling one application and trying to go elsewhere could cause more issues than it solves, based upon other forumites positing on here.  If HSBC have killed the process, then start elsewhere is your only option.  You will not know until you communicate with HSBC.

Funqi

Ok thanks, I called them. They said my application has been accepted, but that I need to go onto their website and apply for the feeder account, then just wait to hear from them. The guy on the phone was quite vague about what exactly happens next. To be honest, I'm not much the wiser, but I'll go and apply for the feeder account meantime.

Funqi

Ok, so I just applied for the feeder account and the application was declined. So now do I have to cancel my application with HSBC? Without the feeder account, the BBL application is now useless right?

I called them during lockdown when I had Covid and they said they'd give me a 3 month holiday on my credit card payments and give me back £100 of the interest I had paid the previous month. Well, the £100 never arrived and they've been marking my credit file with missed payments. I suppose this application decline is also gonna go on my credit file now.

Jeremy535897

They should have confirmed that your BBL application was cancelled. As you can't have two at once, get them to confirm it is cancelled before trying elsewhere.