Amjed Ali of Your Store in Falkirk is having a wrangle with his bank, TSB. He took up chancellor Rishi Sunak’s offer of a Bounce Back Loan (BBL). He got £35,000 over a six year term. He wants to use it to pay off his interest-only loans of £56K. He says: “Business has been good since Covid so I’m putting in the remainder to pay it all off. The bank said ‘you could but we’ve still got the security of the shop’. The bank is throwing its weight around.
“I’ve spoken to the land registry and it says there’s a £56K loan on the flat but zero on the shop but the bank is holding collateral on both. I want them to remove the charge.”
When he spoke to TSB about it they said: “Please note that all the security the bank holds is for all your borrowing. I have been advised from our legal department that the security over the two commercial properties cannot be released whilst the Bounce Bank Loan is still open. This may alter your decision to repay both loans.”
Amjed has spoken to two accountants and several fellow retailers who all say he should be allowed to pay off his other loans and have the charge over his property removed.
As I understand it, the BBL can be used for whatever you want. There are no strings.
Amjed has already paid off his business credit card, his business overdraft and business card loan and, if he paid off the previous loans, TSB would be losing £8-£9K in interest.
He has also done some research and found on Martin Lewis’ MoneySavingExpert guide that BBLs can be used to refinance and or pay off existing debts.
And on the website it clearly states: “Under the scheme, lenders are not permitted to:
- · take any form of personal guarantee
- · take recovery action over a borrower’s personal assets (such as their main home or personal vehicle)
I think what TSB is saying is that, as Amjed is a sole trader and that they had been able to demand personal security on his previous loans, that they are not going to remove that collateral any time soon.
Amjed’s not giving up anyway – he has written to the chancellor’s office to ask for a copy of any fine print.
If you’ve got a retail problem, call Jac on 020 8502 9775 or email: email@example.com.
Update: TSB has since reversed its decision and has now let Amjed use the BBL as he initially requested. It came as a nice surprise especially as it happened on his birthday.