Banks

essex man said:

Banks lent my father way to much money, he would convince them with cashflow projections and come home happy with an extended overdraft.
Ended up taking over with an unserviceable debt and had to spend ten years getting out from under it.

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livestock 1 said:

There’s a saying that one generation makes it and another breaks it.
They don’t realise that in many cases one generation borrows it and another struggles on to pay it back

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essex man said:

Banks lent my father way to much money, he would convince them with cashflow projections and come home happy with an extended overdraft.
Ended up taking over with an unserviceable debt and had to spend ten years getting out from under it.

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SP11 said:

Anybody else having issues with their bank? It’s a long story but basically we had an overdraft with HBOS of 155k. They weren’t comfortable with us at that level and asked us to look into alternative finance. We got a mortgage with AMC to cover 150k whilst working with our “relationship manager” through harvest asking initially for a working overdraft of 30k but we said we would get back to him as harvest progressed as we may need a bit more. So as harvest progressed the weather got worse and ended in a salvage mission. We told the banker this and requested 50k. That was the straw that broke the donkeys back! We were refused an overdraft. This was totally unexped as the bank still had security over one of our properties, our assets are worth around 1.5m and we have been customers with the Bank Of Scotland for 60 years.

we then went to our local MP to see if he could help. Him and his team put alot of effort into it with weeks of work. The banks communication with Us or the MP was poor to say the least! It was so difficult to get through to anyone with any authority. The “head of agriculture” said he had “no jurisdiction over our account” so that diverted all the MP correspondence away from him.

In the end the MP got someone to speak to at the bank, whom we were not allowed to contact directly, who changed the direction of the MP. They are now siding with the bank claiming we could be “insolvent”. That’s not possible considering our level of debt is minimal against our assets.

We have asked if we could get a lower overdraft but been refused point blank. This now means we have no working capital and are forced to sell assets. We have struggled through this trying to defend our business but as soon as the “secret person” spoke to the MP we are left on our own. We tried to re finance some of our machinery but because we have had direct debits bouncing back our credit rating is ruined. And now we are in the midst of the covid 19 pandemic it’s making it harder to sell some things but also all the financial services are stretched.

Has anyone else had or having issues like this? My next step is looking into a no win no fee case against the bank and few employees due to ruining our business reputation.

Had the bank said at the beginning that we might find it difficult to get an overdraft we could have organised alternative finance then. But because of how it all happened they have destroyed our business with a severe toll on our mental health.

My advice is be very wary of banks, especially Lloyds or Bank Of Scotland. Look up Noel Edmonds case against them.

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midlandslad said:

there will be plenty of this with the current generation.Loans take on interest only with no intention of being paid back and just passed on to the next generation.

the problems as I see it is there isnt the income from farming to service large debt whichever way you look at it and the banks Are overly keen to lend.

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jendan said:

But what did he use the money for? If he strengthened the business for your future( like increased stock or land,or put up some good buildings,)it would be a good thing,although obviously to pay back at some time.If it was just to buy a new tractor or car,or go to Tenerife,then not so good.

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welger rp 220 said:

How do interest only loans get passed onto the next generation? Don't they haveto be paid back before then?

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britt said:

That's the point of them. You either treat them as a lease or pay them off when they are so devalued by inflation that the capitol is very little or you sell up or have a windfall.

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Bossfarmer said:

what happens if you get to the end of the term and the loan is bigger than the asset is worth?

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livestock 1 said:

An extremely successful farming outfit from around the borders main man told me ‘you don’t know how to farm properly until you’ve been bankrupt’
A few on here will know exactly who I’m talking about too

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