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I am attaching here a copy of a Business Loan Agreement from mid 2007 and following various peoples analogies of various types of agreements on the forum wonder if someone could give me an opinion on this?
On the face of it, it appears to be a straight forward Business Loan secured on a property, but it doesn't feel right somehow.
Detail:
This is a Sole trader who has a shop incorporated into his home. The downstairs front room was effectively turned into a shop so 75-80% is domestic residence and it is situated on the end of a normal run of terraced houses in Sheffield in a normal street, it's not in a high street full of shops..
The loan is set-up as a Felxible business loan, but you'll see here that the loan is made out as a 'partnership' arrangement with this persons living partner when in reality he runs the business and she has a part time job elsewhere and has no real involvement in the shop. Certainly not a 'Partner' as one would associate with a usual business partnership arrangement. There are no 'partnership' accounts produced and each has their own tax to deal with.
The property is in both their names and although not married the loan security is on the whole property.
NatWest have created this Loan Agreement to look as though it is a business loan when in fact it is paying off the cost of their property too.
I notice a number of people here making comparisons of CCA regulated and Unregulated loans and business loans and I seem to recall there being regulations on residential mortgages at least where the property cannot be used as a business - or there are procedures to follow if one does.
This appears to be set-up as a Regulated Mortgage Contract (RMC) regulated by the FSA, but it looks more like an Unregulated CCA Loan to me.
The original monies were paid into the t/a business current account which carried the charges and the balance then put into a separate Loan Account.
What concerns me is that the bank have now called the loan in as the business effectively ceased trading and the proprietor - the sole trader had a health breakdown following the demise of the business and he seems to have no protections like a mortgage holder might. I wonder if anyone might spare the time to take a look at it for me as it does seem a little odd? - I'm just trying to help him get through this and would like to see if there was anything we could do to remedy this.
Many thanks
On the face of it, it appears to be a straight forward Business Loan secured on a property, but it doesn't feel right somehow.
Detail:
This is a Sole trader who has a shop incorporated into his home. The downstairs front room was effectively turned into a shop so 75-80% is domestic residence and it is situated on the end of a normal run of terraced houses in Sheffield in a normal street, it's not in a high street full of shops..
The loan is set-up as a Felxible business loan, but you'll see here that the loan is made out as a 'partnership' arrangement with this persons living partner when in reality he runs the business and she has a part time job elsewhere and has no real involvement in the shop. Certainly not a 'Partner' as one would associate with a usual business partnership arrangement. There are no 'partnership' accounts produced and each has their own tax to deal with.
The property is in both their names and although not married the loan security is on the whole property.
NatWest have created this Loan Agreement to look as though it is a business loan when in fact it is paying off the cost of their property too.
I notice a number of people here making comparisons of CCA regulated and Unregulated loans and business loans and I seem to recall there being regulations on residential mortgages at least where the property cannot be used as a business - or there are procedures to follow if one does.
This appears to be set-up as a Regulated Mortgage Contract (RMC) regulated by the FSA, but it looks more like an Unregulated CCA Loan to me.
The original monies were paid into the t/a business current account which carried the charges and the balance then put into a separate Loan Account.
What concerns me is that the bank have now called the loan in as the business effectively ceased trading and the proprietor - the sole trader had a health breakdown following the demise of the business and he seems to have no protections like a mortgage holder might. I wonder if anyone might spare the time to take a look at it for me as it does seem a little odd? - I'm just trying to help him get through this and would like to see if there was anything we could do to remedy this.
Many thanks
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