Ease of access to finance can make or break a business. We know that providing fast, practical advice is essential to ensure that funds are there to tide you over in the difficult times or to help you push on with your next venture.
Whether we are asked to advise on documents issued by your bank, take out security over assets and property or draft documents to protect your interests, we provide a hassle free service and a no nonsense explanation of the process and risks involved for you. We are regularly instructed by lenders and investors, as well as borrowers and companies seeking finance. We can advise individuals on personal guarantees and companies on corporate or cross-guarantees together with the associated security package, such as debentures and legal charges, as well as priority arrangements involving deeds of priority, deeds of postponement or intercreditor agreements.
Our team of lawyers works closely with both banks and businesses to ensure that sums being borrowed are made available as quickly as possible. We have years of experience of dealing with the process and know when and how far to push to get a deal completed.
The key issues to consider when seeking or providing finance include
What is the risk to you if you borrow?
In the case of many small to medium sized businesses seeking to borrow sums, the lender may ask for a personal guarantee. This allows the bank to seek repayment of the loan from you as an alternative to suing the business if it defaults. If you agree to this, you may place your home at risk if the business fails and is unable to repay its debts. It’s important that you check at the outset whether a personal guarantee will be asked for and, if it will, consider carefully whether you are willing to agree.
What are the risks to you if you lend?
The biggest risk to you as a lender is that the sums being loaned are not repaid. Whilst you can usually sue the borrower for any outstanding repayments, that right will be of limited value if the borrower has already disposed of its assets. Taking security in the form of a debenture over a company backed up by legal charges against its property, provides you with an option to prevent certain assets being sold in the first place.