PG called in and made me bankrupt, is it irresponsible lending?

LexA0404GSD

Hi Everyone, I am looking for some help. My company entered into voluntary liquidation in January 2025. We had several business loans, and an overdraft, totalling around £160k. One of our creditors actually made me personally bankrupt because I sign a trade agreement account with them in 2020 and totally didn't know it was a PG. The loans and overdraft, I understood at the time that myself and partner were PG's. My question is really, can I complain to the FCA about the lenders as in my opinion, there would have been no way we could have paid these loans and the overdraft back personally, so I do not think the correct checks were done at the time of us (stupidly I might add) applying for these loans to try and keep our business afloat.

MyRealNameToo

FCA do not take customer complaints other than if you believe someone is selling financial products without being licensed to do so.

Did you read the agreements before signing them? How did you miss the personal guarantee part? Generally the credit checks will be against the company, the personal guarantee is just an added level of security for the lender.

Did you declare the business' financial distress when applying for the loans or did you try and claim that things were rosy and the loans were for expansion etc rather than to try and keep it afloat?

The Financial Ombudsman is the mechanism for complaints, but first you need to register your complaint with the company and receive their response (or 8 weeks pass, whichever is sooner). I honestly dont know how the FOS reacts to directors logging a complaint for themselves when the company was the debtor. It would be worth your time checking the Financial Ombudsman website as they post all cases that go to the upper tier for adjudication. A quick look doesnt look to favourable for you, eg https://www.financial-ombudsman.org.uk/decision/DRN3389669.pdf

MEM62

As alluded to by @MyRealNameToo it is more than likely that you agreed to this on the documentation so, when you complain, all they will do is produce a copy with your signature.

fatbelly

I'd run this past Business Debtline

born_again

. One of our creditors actually made me personally bankrupt because I sign a trade agreement account with them in 2020 and totally didn't know it was a PG

If it was just for a credit facility on company purchases. Then as a B2B agreement, it would have been down to you to fully read & understand the contract.

So you would be best digging out the contract to check exactly what was signed for & if it was a regulated product.

Do not think as such this would fall under FCA/FOS register, as they are not providing a loan.

https://www.realityfinance.com/company-information/supplier-information-understanding-b2b-finance-regulations/#:~:text=The%20good%20news%20is%20that,usually%20don't%20need%20FCA%20authorization.

B2B Lending Exemptions

The good news is that B2B lending is generally exempt from FCA (Financial Conduct Authority) authorization. This means that businesses that extend credit exclusively to other businesses usually don't need FCA authorization.

LexA0404GSD

Hi everyone, and yes I was aware I was signing up to the PG's, but I was under the understanding that I would be credit checked as well, and this would have clearly shown the massive borrowing would it not?

JCS1

Was the company limited, sole trader or partnership?

MEM62

https://forums.moneysavingexpert.com/discussion/comment/81945682#Comment_81945682

Sorry, perhaps we were stating the obvious. And yes, it should have flagged your current level of borrowing - which raises the question, if you were in that deep why agree to the guarantee?

In respect of affordability it is likely that the lender would have looked at the business and your personal circumstances when they made their decision.

silvercar

"One of our creditors actually made me personally bankrupt because I sign a trade agreement account with them in 2020 and totally didn't know it was a PG"

Was the business a limited company/ sole trader/ partnership? If unsure, then look how hmrc treated it.

If a company then when you signed the agreement, were you signing as the director of the company or as an individual? Was this clear in the paperwork?

If the business was 'you trading as X' then the trade accountant would have been you and you would be liable.

MasterG83

https://forums.moneysavingexpert.com/discussion/6662068/pg-called-in-and-made-me-bankrupt-is-it-irresponsible-lending

Was it a Ltd company ?