UKC

A hunger strike to expose brutal unfairness in business loans:

https://www.theguardian.com/commentisfree/2019/mar/17/one-mans-fight-expose...

Hold on.....he missed the small print according to his own admission. More the fool him. If anyone is going to borrow £1.6 million then surely they would check the small print first. Anyway, aren't the Clydesdale bank owned by an Australian bank nowdays? 

I can't work out what actually happened? What did I miss? What were the punitive terms that he was not expected to know about? The article is all over the place as one bit says it restructured his loans in 2002 and another says he took the loan out in 2011. It also says "Guidi’s life began to unravel after the Clydesdale entered into a business agreement with an outfit called Promontoria (Chestnut), part of the Cerberus group, which became the unlicensed and unregulated collector of the outstanding loans and securities held on his property" so presumably by that point he'd already defaulted and not been able to agree something with the bank. Surely a £1.6 million loan like this would be against a ltd company? If they were only prepared to loan against his house he'd be aware it was at risk? Seems a strange article for the guardian and I'm not sure describing someone in a position to take out a £1.6 millon loan as "one of the weakest and least protected" in the country is going to gain much sympathy from its readers. 

National Austrialia Group divested its UK operations in 2016:

https://en.wikipedia.org/wiki/CYBG

In reply to Tyler:

I think it originally appeared in The Observer, though the difference is minor.  The article does seem a bit of a mess, although I have to say that the author manages to leave the reader in no doubt where his sympathies lie before he even gets as far as trying to explain what happened to Mr Guidi.

And he was doing so well up until then...

That is one of the most one-eyed pieces of reporting I have seen for while; high on polemic and short on fact. I feel sorry for anyone due to lose their house but there are many who are far more deserving of my sympathy than a man whose business was to acts as the private landlord to 150 residential properties. Have a 'Google' to see the story reported from some other sources. 

Can't be arsed to look up the other sources but by any chance do they read along these lines. 

Guy built up a business on borrowed money,  guy borrowed more money either through greed to make more or desperation because he got in a hole and tried to buy his way out. Guy failed and is now looking to blame someone

Not quite that story. It seems he never missed a payment but Clydesdale divested its commercial loan book to another company who then cranked the rates. This was covered in the T's&C's. It's not nice but I piece from the Graun is over the top and light on journalism.

The standard phrase of 'interest rates may go up as well as down' isn't used in loan advertising without reason.

With that scale of borrowing over time I would  split the loan into £250k sums and reborrowed on fixed terms for x years. So if rates change they don't all change at once, you get a lead in period to modify your plans. 

Plus his business shouldn't have been so reliant on a low rate that the agreement said could change. If he had been paying down the loan he would have gained a small margin to play with. Sounds like he was entirely relying on the rental income to out pace the interest payment. 

The rip-offs in the PPI scandal were also all clearly laid in the small print. When companies (like RBS global restructuring group) deliberately set out to 'wreck for profit' a significant number of businesses they invested in from the start and breached all sorts of other banking protocols, this is simply not acceptable behaviour from a UK bank. Modern UK bank lending is supposed to be far more upfront about risks and supportive if problems occur. The behaviour in GRG was something RBS themselves acknowledged was wrong. It looks very much like Clydesdale behaviour to some business customers was pretty similar.

https://www.cybgremediationsupportgroup.com/?cn-reloaded=1

https://www.dailyrecord.co.uk/news/scottish-news/bankrupt-businessman-go-hu...

https://www.theguardian.com/business/2018/feb/20/mps-publish-full-unredacte...

Quite, so have Clydesdale bank done this? 

I suspect that this £1.6 million is not the full scale of his borrowing

If I was borrowing 1.6m and my whole business plan was reliant on that interest rate remaining fixed. I'd read it all, more than once and still probably spend a couple of grand for someone legally minded to do the same. 

Given that even 1% interest is obviously £16k a year, spending a little on the diligence is just sound business. 

I’ve read a few articles on this, it seems he had assets of around £16m in property in 2015, but £10m of borrowing. He never missed a payment, but the loan Clydesdale sold him was ruled illegal and they sold on his loan to a third party who called it in and were able to sell the property assets at a knock down price (£8m). The exact contract details aren’t clear, it does seem dodgy.

I'd argue reasonable diligence seems to be there (I know plenty of buisness arrangements operating on similar numbers) the bit he didn't anticipate was the loan moving and the subsequent dire treatment. Have you looked at the support group site?

People in the UK have had to be helped when they purchased mortgages it was pretty obvious they couldn't afford and when they purchased PPI they were as stupid as anything to agree to, but people seriously think this guy with an almost certainly viable business has to face the music and lose his house because the loan could move to an asset stripper!? 

The UK has always been behind in funding and supporting SMEs compared to the other big western economies. These companies form the backbone of our economy and the lack of sympathy for a business treated this way, the latest in a long line of similar scandals, is frightening to me. Its hardly like we need new disincentives to entrepreneurial behaviour in current times.

If his business was sound, some level of loan to value rate, good credit /repayment history etc.. why can't he just borrow from another lender, pay this one off and continue as before.

There is no reason to sell the property, unless no one else is willing to lend to him either.

I don't think he is portraying the whole story. 

I think you are plain naive.  Do you seriously think most of these businesses that have been preyed on have the capacity to raise such money in such circumstances (ignoring any possible contractural complications in buying out the loan from a bank that knows there is a large realisable gain, due to their bad behaviour, in the near future). Why would such bank practices have been censured by government commitee if they are so benign.

You keeping talking about PPI and governments etc.. 

I'm talking about this guy borrowing from a different lender to avoid selling. 

HMG Treasury committee published the full unredacted Financial Conduct Authority report (on what looks like very similar practices) in the RBS business loan scandal.

http://www.parliament.uk/documents/commons-committees/treasury/s166-rbs-grg...

The FCA, which  investigated the RBS GRG, usually deems such reports confidential but becuase they regarded it as so serious, the Treasury committee invoked parliamentary privilege to publish it, citing the public interest.

1. What has his case got to do with the RBS one just linked?

2. Why didn't he re-borrow elsewhere to avoid selling? 

Given that the guy seems to have a history of building his business sensibly, never missed a payment and had a large amount of equity in the properties, I have a similar question, perhaps in combination with carefully disposal of some of the properties to reduce the debt. Which makes me think there is something else going on. Loans being moved by the bank to dubious unregulated organisations would be the starting point for me looking at what went on.

How the hell can a business that is worth £12m be bankrupted by a £1.6m loan?

Someone isn't disclosing all of the facts.

Again, it does not appear to be the business man who is behaving inappropriately.

https://www.cybgremediationsupportgroup.com/?cn-reloaded=1

https://hansard.parliament.uk/Commons/2019-03-19/debates/C2B82C4A-104D-4C16...

Another story on problematic RBS loans... local councils this time.

https://www.theguardian.com/business/2019/mar/23/rbs-to-wind-down-1bn-worth...