Explaining Enterprise Finance Guarantee Loan Mis-selling

Transcription

1 Business Loan Claims Explaining Enterprise Finance Guarantee Loan Mis-selling All Square. All Fair. January Enterprise Finance Guarantee Loans were sold through the main UK high street banks and finance houses from This guide will help you identify if your Enterprise Finance Guarantee Loan has potentially been mis-sold and whether you are able to claim financial redress if it has been.

2 About Enterprise Finance Guarantee (EFG) Loans The Enterprise Finance Guarantee (EFG) scheme is a government backed scheme that enables businesses to secure loans between 1,000 to 1.2million. The EFG scheme was aimed at improving the availability of capital and investment funding to encourage institutions to lend to smaller businesses that would otherwise be declined loans for a lack of security or as they suffered from a poor credit standing. Under the EFG scheme, the lending institution decides whether to lend to the business and the Government then provides a guarantee to the lender. However, the problem with EFG scheme was the way that many of these loans were sold. Businesses were sometimes told by the lender that the government would guarantee 75% of the value of the loan if they defaulted, meaning that the business is then only liable for 25% of the value of the loan. In actual fact, the borrower is liable for 100% of the EFG loan and it s the government that guarantees 75% of the loan for the bank. Types of Facilities The following is a list of the types of credit facilities that can benefit from EFG:- New term loans - for working capital and investment purposes Revolving Facilities - new or increased overdrafts, or other forms of revolving facility borrowing Invoice finance facilities Term loans for debt consolidations or refinancing Revolving facility refinance Invoice finance refinance Trade credit guarantees Who provided EFG Loans? EFG Loans were provided by over 40 lenders including the high street banks and specialist finance providers. Call us to see if your lender is on the EFG list. Please call our specialists on to discuss how we can help. EFG Loans provided to Small and Medium Sized Businesses in the UK 9,000 Firms that borrowed from RBS under the EFG scheme 900m+ Lent by RBS under the EFG scheme* *Fee payable if case is not pursued at the client s request. *Source: 2 3

3 It s R Explaining Enterprise Finance Guarantee (EFG) Loan Mis-selling Then in I d like to grow my small business... can you lend me some money please? The recession has really affected my business and I can no longer afford the repayments on the loan. Can I use the guarantee on the EFG loan? BUSINESS OWNER Yes of course. We can offer you a new product called an Enterprise Finance Guarantee (EFG) loan BANK MANAGER No. You don t understand. The guarantee protects us the bank NOT you the borrower. The EFG loan will protect your business from a default so you only have to pay back 25% of the value of the loan if that happens. It s what you need right now. Sign here...have to dash - BYE! Eh? I don t understand. I just want a simple loan. What are the terms and conditions? SIGNATURE Are you sure? I paid an extra 2% annual premium for the EFG loan, surely I must get some benefit or insurance protection? No, thats just an additional fee for the EFG loan that you pay us. What? That s not what I was told before! If I had known that I wasn t protected, I would never have taken out an EFG loan. Lenders may have failed to properly explain the Enterprise Finance Guarantee Loan including the features, benefits and risks. Things seem to be going well - business is growing and I can afford my loan repayments... It s All Square may be able to help you We have the experience and expertise to understand Enterprise Finance Guarantee Loans, how they work and how they were sold. We have a strong track record of assisting businesses claim for complex Business Banking loans and products. Call or [email protected] 4 5

4 Identifying if you were mis-sold Enterprise Finance Guarantee Loans may look simple but they are actually quite complex products that contain a number of hidden features and risks. Business Loan Type Enterprise Finance Guarantee Loan Institution Protected by Government Bank 75% Proportion of Loan Protected In order to identify if you have been affected by the mis-selling of a Enterprise Finance Guarantee Loan, here are some key things to look for and questions to ask yourself: Did your bank properly explain the features, benefits and risks of the Enterprise Finance Guarantee Loan before it was sold? Did your bank tell you that the Government Guarantee protected the business rather than the bank from a default in loan repayments? Did your bank properly explain to you that you could have taken out other loans or credit facilities? Did your bank make it clear that the business was liable for the entire value of the loan? Did your bank provide you with advice relating to the Enterprise Finance Guarantee Loan? If you find yourself answering No to many of these questions, (and Yes to the last one), then it may be that you have a valid claim for a mis-sold Enterprise Finance Guarantee Loan. Don t forget about Consequential Loss If you manage to secure financial redress for a mis-sold Enterprise Finance Guarantee Loan, then it may be that, in addition, you also have suffered Consequential Loss. Consequential Losses arise from additional charges and fees that you may have been charged by your bank as a result of entering into the Enterprise Finance Guarantee Loan. Consequential Loss will also cover other claims relating to loss of business opportunity. What to do next If you believe that you have been affected by any of the issues outlined in this brochure and want to take action to try to get your money back, then please call one of our specialists who will be on hand to discuss your case. For successful claims we usually charge a fee of 20%+VAT of the total settlement. We provide a No Win No Fee * service for all our claims. Why All Square? All Square are one of the UK s leading firms for complex Business Bank mis-selling claims. Staffed by ex-bankers, in-house banking lawyers and insolvency experts, we have built a strong track record of assisting businesses with complex issues relating to claiming for mis-sold business banking products. How we can assist All Square offers a professional service for all issues relating to claiming for mis-sold Enterprise Finance Guarantee Loans. Claims for mis-selling of Enterprise Finance Guarantee Loans Financial Ombudsman Service (FoS) complaints Litigation Claims for a Consequential Loss *Fee payable if case is not pursued at the client s request. 6 7

5 Business Loan Claims Explaining Enterprise Finance Guarantee Loan Mis-selling Disclaimer This document is designed to be informative but is not intended to constitute advice, whether legal, financial or otherwise. We make no warranties or representations about any of the content (including, without limitation, the quality, accuracy, completeness or fitness for any particular purpose of such content). 8 All Square is a trading style of All Square Finance Limited. All Square Finance Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities, its registration is recorded on the website (Authorisation No. CRM31952). All Square Finance Limited is registered in England and Wales under Co. No Registered office at Unit 1C, Riparian Way, The Crossings Business Park, Cross Hills, Keighley, BD20 7AA Telephone: +44 (0) Facsimile: +44 (0) VAT NO: