Whilst we hear plenty in the news about residential property market woes, we hear very little of the suffering going on in the commercial market. I read a recent article about two investors who had taken out a commercial loan to fund a hotel development.The bank called in the loan, leaving the developers high and dry with no alternative except repossession.
The banking crisis has meant that some banks need to get these large loans off their books and physical cash back in the vaults- at any cost.
RBS & Nat West Are Worst Offenders
Two of the worst offenders are RBS and NatWest. They are calling in loans with no warning and forcing companies into liquidation or repossessing their properties, only to sell them at massive loss at auction. I heard another story of a chap who owns a chain of fish and chip shops and missed one payment of the loan-which was subsequently paid back the following month. However, that one missed payment meant the bank decided to start repossession proceedings. The business was in profit at the time!
Another guy we knew had a development of a small block of flats which ran into difficulties when the market changed. His aim was to pay the finance back by selling. Market conditions meant he had difficulty selling, so he did the only sensible thing and decided to rent the properties. This enabled him to keep the development, make a healthy profit and stay in business. However, the bank decided this wasn’t good enough and started repossession proceedings. They wanted the loan back, regardless of the cost/loss to him.
Illegal Proceedings
Commercial bank loan contracts often have clauses regarding timescale and how the loan should be paid back. It seems that many banks are using any excuse just to get these large loans, often running into millions, off their books. Family businesses are being lost, causing much heartache and pain by forcing a fire sale on profitable businesses. Businesses which are then lost to the community forever.
Another tactic used by banks is to call in the business owner and tell them that their existing loan will be “restructured.” Often this means forcing the business owner onto a new loan with higher interest charges and a fee for arranging the enforced change to boot! The alternative offered being repossession.
What business owners don’t realise is that many of these heavy handed practices are illegal and can be challenged.
Write Down Your Commercial Loan & Refinance It
If you are in a situation similar to the above, we can help stop the commercial loan being called in. Our financial expert negotiates directly with the bank chairman to get the loan written down by up to 50% of it’s original value. This loan can then be refinanced via newer banks who do have money to lend, or we can find other exit strategies.
This is a win/ win for all concerned. The original bank is paid off, and the business person can carry on trading with a new loan in place. The new loan often has better terms because the loan value is now less to pay off. 
If your commercial loan is being called in by the banks, it’s very likely we can help you. We could even help some Landlords with BTL portfolios in similar situations. Get in touch and we will pass you on to our experts for a confidential chat. Have a look at our Commercial Loan Restructures page for more in depth details.
Lastly, if you are looking for any kind of property finance from those who do want to lend, check out our finance page.
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