Established in 1992
EFG & Small Firms Loan Guarantee Scheme
Banks have clear procedures for their employees when they sell EFG loans or are 'setting up' Director's personal guarantees for company borrowings. The procedures should make sure that Directors, small business customers and individuals providing personal guarantees are properly informed - so they can make informed decisions before entering into any banking or lending agreements. IBAS has a long history of helping Directors, Businesses and individuals who have provided personal guarantees but have not received fair treatment from banks. IBAS has investigated many such complaints. Our experience has shown that banks do not always follow the correct procedures laid down by their bank and then put the customer at risk from not doing so. IBAS expertise in dealing with banks and specifically banking agreements, directors personal guarantees and bank debt means we offer very experienced and specialist guidance on the merits of banking complaints and also provide options with which to pursue those complaints. IBAS provide Directors with EFG or small firms loan guarantee (SFLGS) debt claims with advice and assistance and provide director's bank personal guarantee claim advice.
see Business: Your Money Not a moving account - BBC 22/07/99
See sample of IBAS Testimonials
IBAS knowledge has been collated from thousands of IBAS business banking cases over 25 years which provides unique ʻback-upʼ information (which is only available to IBAS) and which we use to assess where to investigate and what will produce the best results.
IBAS is now in it's 26th year helping/guiding those with UK Business Banking disputes and Director's Personal Guarantee business debt claims - IBAS is the only UK non profit organization which provides business banking customers with specialist business banking assistance and specialist business banking guidance and also IBAS specialist business banking investigations.
IBAS acts as a conﬁdential business partner and advisor for your business by providing reliable data and expert advice and will be a valuable addition to your management team. The additional attentiveness in your business ‘banking relationship’ and quality of information that IBAS provides allows your management team to concentrate on all other areas of your business, whilst making certain that your business banking account charges are correct and that bank interest charging is not (and has not been) inﬂated or excessive.
Commercial Property Mortgages - IBAS has seen commercial property mortgages during the last year where the bank has incorrectly charged interest and also incorrect margins as far back as 2005 up to date. That can also mean the bank has involved their 'Specialist' bank department who have inflicted Excess and Penalty interest on Commercial Property Mortgages where they should not have done so - reducing company profits and opportunity. This is not just one bank. The amounts are considerable. The results of such bank conduct if left unchecked or unidentified where the company trading is already reduced or is under pressure will inevitably create a default. That in the circumstances outlined would represent a 'False default' which is 'created' by the bank. That creates an insolvency situation where the bank's conduct can go entirely unnoticed despite property and assets being devalued and then 'lost' by the business. At that stage, Director's personal guarantees to the bank will also be 'called upon'.
Often, Lenders appear less concerned with the quality of the information they provide to the company once they’ve provided the lending decision and also sealed their debenture in place. IBAS believes internal problems have created Lender’s maladministration of EFG & SFLGS accounts and the knock on effect may end in the business failure.
When a company is placed in this position it has great difficulty in operating - having expended considerable time and usually all their own spare funds in reaching that stage. Companies borrowing by way of an EFG are particularly vulnerable to lender 'inertia' and some Lenders are much less reliable than others.
IBAS has found that in EFG and SFLG cases, it is the Lender’s control over the Company assets which restricts and often completely eliminates any new ideas for funding or indeed any other form of alternative funding. This remains the case even though the Lender has reached a point where they are no longer prepared to provide any further support to your Company or in some instances deny any ongoing support.
The nature of the EFG & SFLG is that the scheme is designed to provide financial backing with some financial support to those who do not have the necessary assets to borrow ‘against’ but do have a workable or worthwhile business plan (or project). The Lender support their understanding of the Business Plan by their confirmation of the application, which itself is supported by the DTI in a Guarantee for the Lender.
The Lender’s desire to lend is assessed against the Business Plan and strength of management. Personal assets and/or personal security are not intended to be a major consideration. The strength of the Business Plan at the beginning of this process is therefore the most important consideration and the Business Plan itself must be carefully considered by the Lender in detail.
Once the Lender has investigated the financial strengths of the Business Plan and made the decision to lend - that commitment carries with it a considerable duty to provide professional care in the handling of that account - as from that time onwards the Lender by holding a full debenture over the Company will inevitably control the Company assets and indeed the Company’s financial strategy in any future or further borrowing requirements.
IBAS are concerned that we have seen cases where Lenders deliberately delay in providing crucial information. This prevents a Company making essential financial decisions and any Lender would be aware from previous experience that such a Company would be largely unsuccessful in gaining another lenders support to ‘pick-up’ an SFLGS (or EFG) at that stage.
When a EFG or SFLG fails there may be a small loss to the Lender (as seen in the Graham Review on SFLG's - initially the major loss will be to the DTI (from the Guarantee which they provided to the Lender). However, a much greater loss may be felt by those individuals borrowing on an EFG or SFLGS which fails. If they are company directors of the failed company and the lender has Personal Guarantees for the Limited Company borrowings they may be at personal risk from insolvency. The Lender will chase for payment on behalf of the DTI (from the EFG or SFLGS Guarantee itself) regardless of the fact that the Lender will have been paid.
Where Personal Guarantees have also been provided to the Lender for a SFLGS or EFG, which then failed this PG can provide the Lender with an opportunity for a ‘double’ claim. The lender has the discretion, within the terms of any agreements on security, to apply the proceeds from any business assets to reduce the guaranteed loan. If proceeds are insufficient to cover the guaranteed loan and other debts, then any personal assets or guarantees pledged against non-Scheme lending would be used to reduce the other debts. If the borrower has business assets, such as stock or premises, that have been taken as security against the loan, the lender will use these to reduce the outstanding debt. This will enable the lender to reduce its claim on the DTI's guarantee or to reimburse the DTI if it has already paid a claim.
IBAS 'case work' since 1992 has provided us with invaluable experience and has shown us how banks operate. IBAS has extremely specialist knowledge, gathered from IBAS investigations of business banking account disputes over time and all IBAS knowledge and experience is used on your 'case' - no other organization has either our experience or IBAS knowledge.
Bank debt recovery officers are trained to control conversations with customers once they have them on the phone. Bank debt recovery officer's training and their legal knowledge at debt recovery provides banks with a distinct legal and also psychological advantage. Particularly, when the customer is attempting to 'negotiate' themselves using the telephone. It is not an ordinary conversation and the customer is immediately placed under pressure and at a disadvantage as the bank's debt recovery officer takes control of the conversation to obtain what they want - which is information to use against you. They are not employed to 'advise' you - they are employed by the bank specifically to protect the bank and get your money from you. Customers have little knowledge of a bank's debt recovery strategy or how it operates but Bank debt recovery units are very skilled in defending the bank's position and are trained to use their legal position and knowledge to prevent defences from arising at an early stage in the bank's claim.
That is why the banks seek your asset/income information as a first priority and immediately the bank has that information the customer is under increased pressure for payment regardless of any disputes or complaints which you may have previously raised.
IBAS has featured on BBC TV, BBC TV News, ITV, Meridian and Sky News and contributed to many editorials and articles including those for the Sunday Times, Times, Daily Mail, Daily Express and Daily Mirror.- see Business: Your Money Not a moving account - BBC 22/07/99
Independent Banking Advisory Service (IBAS) - IBAS launched in 1992 as a specialist unincorporated business banking membership organization assisting bank customers with UK business banking account loan disputes and business banking debt disputes with their bank. Our analysis and investigation of business bank loans, business bank accounts, business banking contracts, business banking account facilities and business banking debt recovery information has been instrumental in our member's success.
Last modified: 23rd September 2018