Advice please on non personally guaranteed business overdraft

[typolee]

Our business has come up for a overdraft review with Lloyds basically at the wrong time. We have been using our overdraft a lot due to cirumstances beyond our control however we are now in our peak season whereupon by the end of August/September we will be out of the overdraft however our review is typically on the 15th August a couple of weeks before invoices are due to be paid at the end of August. However the overdraft expires on the 25th.

When I spoke to Lloyds a few weeks ago they informed me that the overdraft was not personally guaranteed and they sent some forms to be signed and witnessed rather hastily! I have not signed them as we have had the overdraft for 8 years and this is the first review we have had. They gave us the overdraft when the business was turning over half of what it is now.

My question is if they pull the overdraft what happens if I switch banks. Can they only come after the business for the overdraft balance and not me personally. How nasty will it all get? I have every intentions of paying it back for example on a repayment plan but my concern is if they say hard cheese we want the overdraft back where do we stand.

Any advice would be greatly appreciated. BTW the company is now the strongest it has been in its history whereupon in a few months down the line we would no longer need the overdraft anyway but at this point its bad timing how the review has come up.

 

[japancool]

How much is outstanding on the overdraft?

 

[Mark T Jones]

It looks to me like a situation where factoring is the solution , @Ian J is your man for that.

If factoring isn't appropriate, there will be several other options for a successful business.

To answer your question, it's probable that Lloyds will chase hard given the trading situation

 

[typolee]

It looks to me like a situation where factoring is the solution , @Ian J is your man for that.

If factoring isn't appropriate, there will be several other options for a successful business.

To answer your question, it's probable that Lloyds will chase hard given the trading situation

Chase the business hard and not myself I presume as there is no PG?

 

[WaveJumper]

Surely if things are as good as you say they are, when armed with all your relevant paper work and current business plan they will be falling over themselves to increase your limit

I am not sure I fully understand your second paragraph have they sent you new forms to sign and return or are you referring to the original docs, whatever the case are you 100% sure there's no PG's attached, there's been plenty of threads before where people have been caught out.

 

[Porky]

Two aspects to consider as I see it:-
1. The od currently has no PG so yes, you could go elsewhere stick two fingers up and they go after the business if they call it in but you want to trade and maintain good credit so better to work it out. I do think however, most likely new deal will ask for a PG it wouldn't surprise me.
2. If the call it in, sounds like you need a loan or credit line from somewhere else. If you want to do something outside of the bank I have foubd IWOCA quite good in some situations. It's like an OD, give you and credit limit you can draw down from and you pay interest on the draw down whilst you need it. Might not be good for what you want but worth exploring; probably need a PG though;
www.iwoca.co.uk
There are others and as @Mark T Jones posted factoring could be another angle here. Good luck

 

[Ian J]

It looks to me like a situation where factoring is the solution , @Ian J is your man for that.

If you feel that factoring might help please feel free to give me a ring on 01827 707680 factoringsolutions.co.uk

It is highly likely that a factoring company might want a PG too but that is slightly different as a factor will advance you say 80% of your invoices and if your company were to fail the PG would only come into play if they couldn't collect the 80% from your customers