Home > Uncategorized > Sly and disgraceful behaviour by a major clearing bank?

Sly and disgraceful behaviour by a major clearing bank?

A few months ago a client of mine was offered a £80k overdraft facility by a major bank to “take them out of invoice financing”. Given that my client had a turnover of only around £800k and a less than wonderful balance sheet, I was a bit startled by this offer. Unsecured lending to an amount which was a huge multiple of their assets? It didnt weigh up. The bank made it very clear that it was to clear the invoice finance facility. My client was happy with the facility and didnt bite.They smelt a rat.

My client has since gone bust but what was the banks offer all about? I could guess

Last week another client of mine received an offer of £100k from same bank to “take them out of invoice financing”. He replied that he would rather have a £100k loan. A loan is obviously more secure and diminishes in risk as it is paid back. You would think the bank would much prefer that option rather than the overdraft

No. They insisted on an overdraft “to clear the invoice financing”

Why is this bank so keen to offer substantial overdrafts that are unsecured? I think you may well have guessed already

Their own invoice financing has a poor reputation on any number of levels. Few brokers would choose it for a client

But what if the bank sucked a client in with this “overdraft” quickly to be withdrawn and forced onto their IF ?

I think its fair to assume that that is the tactic here. I think its fair to say that this banks behaviour stinks

The client would end up much worse off than before. You can be they would not have the facility and service I found for them

If you want to know which bank this is, feel free to mail me

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Categories: Uncategorized
  1. N SIMKINS
    July 13, 2015 at 8:59 am

    Hi there,Regarding your post on Sly and Disgraceful behaviour by a major clearing bank….I am intrigued to know which Bank you are referring to, I would guess RBS or HSBC but have seen this tactic also used by Aldermore previously ??Whilst writing just to let you know I enjoy reading your blogs, very good choice and selection of topics and well written too !!.With best regardsNigelnigelsimkins@btinternet.com07528 332158

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