Is there any point being Ltd anymore?

[timskipper]

I was just talking to someone from HSBC and they said they now have a policy of not extending any more than £3,000 total credit (inc. overdrafts/company cards etc) to a limited company without a personal guarantee from the directors.

£3k is bugger all really, makes you wonder if there really is any point in running a limited company these days.

What do you reckon?

[Eric Mc]

Yes - but the concept is being eroded all the time - both from a limited liability point of view and from a tax point of view.

[mrmr96]

timskipper said:

I was just talking to someone from HSBC and they said they now have a policy of not extending any more than £3,000 total credit (inc. overdrafts/company cards etc) to a limited company without a personal guarantee from the directors.

I find it very difficult to believe that this is a blanket policy for all Ltd companies.

[timskipper]

mrmr96 said:

timskipper said:

I was just talking to someone from HSBC and they said they now have a policy of not extending any more than £3,000 total credit (inc. overdrafts/company cards etc) to a limited company without a personal guarantee from the directors.

I find it very difficult to believe that this is a blanket policy for all Ltd companies.

Me too, so I asked that specific question, and was told yes it is indeed a blanket policy for all ltd companies.

[dcb]

timskipper said:

What do you reckon?

One swallow does not make a summer.

You can take your business elsewhere from HSBC if you wish.

I know I did.

[mrmr96]

timskipper said:

mrmr96 said:

timskipper said:

I was just talking to someone from HSBC and they said they now have a policy of not extending any more than £3,000 total credit (inc. overdrafts/company cards etc) to a limited company without a personal guarantee from the directors.

I find it very difficult to believe that this is a blanket policy for all Ltd companies.

Me too, so I asked that specific question, and was told yes it is indeed a blanket policy for all ltd companies.

With respect, though, the information you have recieved is 2nd hand.

[timskipper]

mrmr96 said:

timskipper said:

mrmr96 said:

timskipper said:

I was just talking to someone from HSBC and they said they now have a policy of not extending any more than £3,000 total credit (inc. overdrafts/company cards etc) to a limited company without a personal guarantee from the directors.

I find it very difficult to believe that this is a blanket policy for all Ltd companies.

Me too, so I asked that specific question, and was told yes it is indeed a blanket policy for all ltd companies.

With respect, though, the information you have recieved is 2nd hand.

How so? I was talking to someone in the small business loans dept at HSBC. Does it get anymore first hand than that?

[DonnyMac]

timskipper said:

mrmr96 said:

timskipper said:

mrmr96 said:

timskipper said:

I was just talking to someone from HSBC and they said they now have a policy of not extending any more than £3,000 total credit (inc. overdrafts/company cards etc) to a limited company without a personal guarantee from the directors.

I find it very difficult to believe that this is a blanket policy for all Ltd companies.

Me too, so I asked that specific question, and was told yes it is indeed a blanket policy for all ltd companies.

With respect, though, the information you have recieved is 2nd hand.

How so? I was talking to someone in the small business loans dept at HSBC. Does it get anymore first hand than that?

Hi Tim - they're not picking on you; you're right £3k max to small business without a Director PG.
I've always found HSBC to be excellent both for business & personal premier accounts.
D

[mrmr96]

timskipper said:

How so? I was talking to someone in the small business loans dept at HSBC. Does it get anymore first hand than that?

I stand corrected, please accept my apologies. I thought you meant you were talking to someone who had been into HSBC, not someone who worked there.

I am very surprised by this. Was there any indication as to whether the limit applied to only certain sizes of businesses? I can't imagine a £50m turnover company wishing for a £100k loan would require Director PG's, or is the world REALLY that topsy turvy at the moment?

[LivinLaVidaLotus]

HSBC are very conservative, that's why they aren't in quite as much trouble as most of the other banks right now. As they've always had a fairly conservative lending and risk policy in my experience of dealing with them (17 years).

[groomi]

I had an unsoliceted letter from Barclays today offering me a business loan of £24k.

I'm currently thinking of ways to spend it before doing a pre pac...

[mondeoman]

groomi said:

I had an unsoliceted letter from Barclays today offering me a business loan of £24k.

I'm currently thinking of ways to spend it before doing a pre pac...

Lucky bugger - they won't even take us on as customers, despite turning over £1m pa and £350k profit...
ho hum

[CR0X]

timskipper said:

mrmr96 said:

timskipper said:

I was just talking to someone from HSBC and they said they now have a policy of not extending any more than £3,000 total credit (inc. overdrafts/company cards etc) to a limited company without a personal guarantee from the directors.

I find it very difficult to believe that this is a blanket policy for all Ltd companies.

Me too, so I asked that specific question, and was told yes it is indeed a blanket policy for all ltd companies.

rubbish from our meeting with our bank manager today. We are a SME but our lending is close to £200k.

[skwdenyer]

Eric Mc said:

Yes - but the concept is being eroded all the time - both from a limited liability point of view and from a tax point of view.

That is true up to a point, but limited liability is intended to protect the shareholders, not the Directors. That distinction is often missed

[m4tt]

timskipper said:

mrmr96 said:

timskipper said:

I was just talking to someone from HSBC and they said they now have a policy of not extending any more than £3,000 total credit (inc. overdrafts/company cards etc) to a limited company without a personal guarantee from the directors.

I find it very difficult to believe that this is a blanket policy for all Ltd companies.

Me too, so I asked that specific question, and was told yes it is indeed a blanket policy for all ltd companies.

It is indeed true of the Retail Business operation - Turnover up to £500k and lending up to £30k. After that it becomes properly relationship managed via a Commercial Manager. If anyone has more than £3k lending through a LTD with HSBC and are managed by the branch based staff not a Commercial Manager and don't have a PG then they have slipped through the net. As mentioned HSBC are very conservative and this shows in the current situation.

If you are getting lending and are almost forced to sign a PG my recommendation is to make sure that it is a limited guarantee, I certainly wouldn't sign an unlimited one with any of my business interests.

CR0X said:

rubbish from our meeting with our bank manager today. We are a SME but our lending is close to £200k.

I find it hard to beleive that any bank would lend £200k to a SME without either tangible security or a PG. Unless they were a VERY large SME with a long track history with that bank. Not saying it doesn't happen/calling you a liar, however it would definately be the exception rather than the rule. For sure at the moment any new lending has be cast iron secure!

[Eric Mc]

skwdenyer said:

Eric Mc said:

Yes - but the concept is being eroded all the time - both from a limited liability point of view and from a tax point of view.

That is true up to a point, but limited liability is intended to protect the shareholders, not the Directors. That distinction is often missed

Of course - and the limited liability extends to not just financial losses, but legal liability and negligence claims - so it can still be VERY worthwhile.

[CR0X]

CR0X said:

rubbish from our meeting with our bank manager today. We are a SME but our lending is close to £200k.

I find it hard to beleive that any bank would lend £200k to a SME without either tangible security or a PG. Unless they were a VERY large SME with a long track history with that bank. Not saying it doesn't happen/calling you a liar, however it would definately be the exception rather than the rule. For sure at the moment any new lending has be cast iron secure!

well, I suppose 137 year history with HSBC might have something to do with it. We are their oldest customer in the South ... we do have a property but this time last year, they were quite sticky about lending above our current limits (at that time) but now a bit more flexible. A new bank manager has helped us no end; gone is the graduate type, replaced by a more mature gentleman, who I assume, has less thought of rapid promotion.

[Hobo]

mrmr96 said:

timskipper said:

How so? I was talking to someone in the small business loans dept at HSBC. Does it get anymore first hand than that?

I stand corrected, please accept my apologies. I thought you meant you were talking to someone who had been into HSBC, not someone who worked there.

I am very surprised by this. Was there any indication as to whether the limit applied to only certain sizes of businesses? I can't imagine a £50m turnover company wishing for a £100k loan would require Director PG's, or is the world REALLY that topsy turvy at the moment?

Since when has turnover had any relation to ability to gain credit ?

As they say 'turnovers vanity, profits sanity'

[JustinP1]

Hobo said:

mrmr96 said:

timskipper said:

How so? I was talking to someone in the small business loans dept at HSBC. Does it get anymore first hand than that?

I stand corrected, please accept my apologies. I thought you meant you were talking to someone who had been into HSBC, not someone who worked there.

I am very surprised by this. Was there any indication as to whether the limit applied to only certain sizes of businesses? I can't imagine a £50m turnover company wishing for a £100k loan would require Director PG's, or is the world REALLY that topsy turvy at the moment?

Since when has turnover had any relation to ability to gain credit ?

As they say 'turnovers vanity, profits sanity'

Because turnover is one of the boxes they fill on the computer screen before it gives a decision.

A true story is that when I used to bank with HSBC I had to explain the difference between turnover and profit to my business manager when they were assessing our creditworthiness as she typed it wrong into the computer and made us into a company that loses tens of thousands a year...

[Lost soul]

timskipper said:

How so? I was talking to someone in the small business loans dept at HSBC. Does it get anymore first hand than that?

" Small business loans dept"


There is your answer , so probably not applying to all Ltd company