Hi
We have signed loan agreement. Our solicitor has completed all documentation from our end and we have signed documentation with him. The bank are saying their solicitor will not sign documents to complete the process.
I was not trading but the pub had been trading well prior to our purchase. We developed a business plan which the bank was happy with and even with reduced turnover we would meet bank payments.
thanks for your help
Okay, so the Bank have instructed their solicitor not to finalise the security.
Get your solicitor to get a formal response from the solicitor acting from the Bank. You want to know why they are refusing to complete the assigned task in black and white, and if they've been told to defer action for a period of time, or cancel the transaction completely.
Get your solicitor to examine the Bank loan agreement, to include their standard terms and conditions, to see if they have a "force majeure" clause, or similar, in their paperwork, which essentially allows them to withdraw from the transaction.
Depending on the outcome, it may still be appropriate to try and apply pressure, through the Bank's CEO, but much depends on the circumstances.
The Banks are all holding back on commercial transactions, where they believe that there is a genuine risk of default, if the loan proceeds. In most cases, the deals are simply being delayed, in the hopes that businesses will be back open in a few months time, and we can all just mark this period down to an extraordinary and exceptional financial period. However, I'm also hearing that some lenders (particularly the non Bank commercial lenders), are taking the opportunity to withdraw from deals completely.
It seems that you went ahead and signed contracts and engaged a builder, before you had your funding arrangements finalised. Is that the case? If that's the case, then the opportunity to hold the Bank responsible for the financial commitment that you made to your builder, is gone.
Gordon quite rightly mentioned the SBCI facilities and in particular the Credit Guarantee Scheme. This is typically used where a Bank wants to lend the money, but isn't happy with the security on offer, for example. I don't think it's going to be the solution to your current problem, to be honest.
Unless your are in a position to show that the Bank confirmed that you were clear to use the loan funds, before you made your financial commitments to the builder, then you don't have any real leverage over the Bank. In that instance, forget the CEO, your approach will have to be :
* direct contact with the lender, to see if the loan is deferred, or cancelled.
* submitting an appeal to the Bank, appealing the decision to delay or cancel the loan.
* assuming the appeal is declined, you can then also approach the independent Credit Review Office, and ask them to consider your circumstance and what's happened.
* you could also submit a formal complaint to the Bank, but it's unlikely to achieve anything and certainly, little of real substance.