Urgent Bank Advice Needed

[richardb13]

Hi All

Ive recently started a small IT company, We bank with lloyds TSB.

Our first big job was for a school and the county council messed up our payment (after remmitting to us) anyway we ended up bouncing 7 cheques all for just a few hundred pounds. The school have now paid and we are very much in credit with lloyds and business has now kicked off so regular payments are expected.

However i have had a letter today saying they are closing our account in 30 days.

What do i do?? im gobsmacked.

Any advice. Will another bank deal with us now??

Many thansk
Richard

 

Phone up and ask to speak to your business banking advisor immediately. You have more chance of salvaging the situation if you can put your case in person to them.

 

[cjd]

I agree with the above advice but you may find that the decision has been taken by head office not your local guy - it'll be whoever signed the letter that you have to convince.

In any case you should start looking for a different bank now just in case they still don't want to play.

 

[Dawg]

Why do you want to stay with them if they treat you like this?

 

[TechFox]

Go with NatWest. They have treated me very well.

 

[bwglaw]

The bank's view is that if you have issued cheques with full knowledge of no funds being available on your account, or an overdraft facility being in place then you have committed a criminal offence.

A bad start in a banking relationship but you will need to persuade the Bank to reverse their decision.

Jonathan

 

[Dawg]

Johnaton said

The bank's view is that if you have issued cheques with full knowledge of no funds being available on your account, or an overdraft facility being in place then you have committed a criminal offence.

Quite right. And the Bank's view was almost certainly based on transaction records, with no personal intervention asked for or given. If that is the level of service they offer, leave them. Nat West are better, so are HSBC and Alliance.

Although an advisor to SEEDA (South East England Development Agency), once told me that all the banks were as bad as each other, and once you start moving account you will keeep moving account, and in 5 years you will be back where you started!

 

[Ian J]

If that is the level of service they offer, leave them. Nat West are better, so are HSBC and Alliance.

My guess is that every other bank would have done exactly the same thing in similar circumstances. When you knew that the payment wasn't going to be received on time you should have telephoned the bank and explained your predicament.

Your best bet is to try and convince your existing bank that you made a mistake as you issued cheques in the firm expectation of payments being received as promised by the Council and with luck they will put it down to naivete and give you another chance.

 

[bwglaw]

The Bank will argue that no cheques should have been issued without receipt of cleared funds.

Jonathan

 

[KM-Tiger]

The Bank will argue that no cheques should have been issued without receipt of cleared funds.

Doubtless they will, but hands up those who have never issued cheques against uncleared funds.

The OP said "the county council messed up our payment (after remmitting to us)". That sounds to me like they received a remittance advice saying that funds would be credited on a certain date, but that then did not happen.

I would certainly put that in the category of an honest mistake - it was a County Council, not FlyByNIght Ltd making the credit - though an unfortunate one for a new account, and I guess it's the lack of track record that has led to this high-handed decision.

Mistakes do happen, and a better bank would give the opportunity to rectify. I did something similar in the early days of my current business, and HSBC were glad to help out - covering some cheques for a few days - and made a nice profit by charging me for doing so. Lloyds are being very short-sighted here, I would move elsewhere. Tell the new prospective banks exactly what happened, and give them the opportunity to show how they would have dealt with it better.

 

[bwglaw]

Agree with you KM. We don't issue cheques at all and insist on payment by electronic transfer so we only send out what is already in the account. We do not rely on remittances.

Cheques are time-wasters because you can never know when the payee will cash it and when it will be cleared.

We are with HSBC and they are the best for business banking

 

[Gillie]

From my experience of dealing with the various banks over the years, Nat West are the worse ones as regards issuing cheques ahead of cleared funds and will jump down your throat the hardest for doing it.

That said, all banks would deal with this situation in the same vein, unless you have formed a relationship with them. Ring them talk it through and see if you can salvage a bad situation.