Im looking to try and get some help im absolutely desperate for some legal advice, my partner bought a mobile sandwich van he got finance ( nationwide corporate finance/alfandari)to pay and his mother and stepfather are guarantors on it as they own their own house ,we are really struggling with the repayments and don't know what to do , the people who sold us the buisness were not honest with us so the cafe isn't covering the loan , the payments started in jan this year and the cost is approx 300 every week over a period of 4 years ,the business cost 40,000 and APR 49% , we have spoken to a soliticor who advised to ask his mother to get equity release on the house then to pay off the finance company with that ,then pay her back , when we asked for a settlement cost they have come back with 57,000 , we feel this is just morally wrong ,can they do this ? Do we stand anywhere regarding anything ? Regards Becky
When you purchased the business exactly what did you purchase? Did you do due diligence on the business? Did you get help from any professional? What type of business do you have? Limited? Sole trader? Partnership? Finance agreement - what does the contract say about paying back early?
It's a limited company , there is a mobile sandwich van and everything that came with it eg, oven , griddle,fridge,generator etc, no advice was given , we were very stupid and have no idea what we were thinking , we didn't look at the small print
Hate to say it, the small print is important. As is making sure you know what you are buying. Ok, you are struggling now. First ask yourself is the company insolvent? https://www.gov.uk/government/publi...insolvent/options-when-a-company-is-insolvent If its not insolvent then you can look at options how to deal with the problems. If it is insolvent you have to take different action immediately including professional advice. Ok, two areas - income and costs. Change one or both. You are already looking at refinancing the loan - read the finance agreement carefully, business to business deals revolve around the contract. Can you change the income much? Without spending much extra can you increase the income? Costs - are you buying wholesale? Are you buying from a 'cash and carry' type place? Or from a shop? Worth looking around for alternate suppliers - sometimes people end up paying too much and can get a better deal with someone else without affecting quality. Can you cut directors wages? Don't try cutting anyone else's though if employing someone else can you let them go?
Thanks for your reply, my partner has asked for a copy of the signed documents so we can go through them carefully, we do get product s from various wholesalers to keep costs down and regarding wages I work there 3 days a week and don't take a wage my partner does one day , we both have other jobs you see, we really are in a pickle
Unfortunately whilst you have chosen to deal with an unethical lender/ broker, they have almost certainly acted legally I spend a lot of time trying to persuade start ups to actually raAd what they are signing. Moving forward slid look towards Making a sensible settlement figure which the courts might uphold.
What are you selling from the van, where are you selling, what hours etc. It looks a horrendous APR figure, so your only real way out is to trade much better since as mentioned the finance company have probably covered themselves. That said, a mobile food van should be able to make good money if done well. Why do you feel you are struggling?
It would seem to me that there are 2 potential avenues to pursue here One is go evaluate the business and make it work. There are many, many of these businesses making good money so why is yours not one of them? Whilst it is never s bad idea to revisit your costs, in a high margin business like this it is unlikely to be the whole answer. Look at successful operators. What are they doing different/better ? Option 2 is to well the business and come to an arrangement with the lender to cover the shortfall. Most lenders will be receptive to sensible offers of payment schedules.
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