Unworkable business loans and personal guarantees

A Government-inspired business loan scheme would only work if operated in the way that it was actually missold by RBS (Royal Bank of Scotland), according to the director general of the British Chambers of Commerce (BCC).

Under the Enterprise Finance Guarantee Scheme RBS wrongly led borrowers to believe that 75% of the loan was guaranteed by the Government and that borrowers were only required to offer personal guarantees for 25%.

In fact, the 75% government guarantee was to the lender (RBS) only and borrowers were liable to offer personal guarantees for the full 100%.

While RBS has admitted misselling the loan scheme the BCC’s John Longworth has argued that the Government version of the scheme was useless.

In fact, he has said, it would actually only have been of use to small business borrowers if it had actually operated with the government guaranteeing 75% protection to lender with the borrower guaranteeing 25% in the way it was missold.

Are you one of the estimated 9,000 businesses that borrowed through RBS via the scheme? Tell us your experience.

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