Bank Business Loans Loan Swap Con

Bank Business Loans Loan Swap Con.

90% of businesses may have been mis-sold special insurance on their business loans.  Research by the financial industry regulator the Financial Services Authority suggests that 90% of their business loan sample had failures in the suitability and sales process.  

A number of leading banks have already been cited by the FSA in addition subsidiaries of the same such as Clydesdale Bank have also been named and forced to review.

What is an interest rate swap?
It is an insurance policy taken if you wish to insure against the risks of interest rate rises on your loan.

What has happened?
Interest rates have fallen meaning that many businesses are still paying high premiums for insurance that they are locked into and unable to leave or cancel due to excessive penalties, in short they are trapped.  

Our view
Business loans should not be arranged in the first place if a business is likely to be unable to afford it in an economic downturn or if interest rates rise in the future…

Banks again have been shown to not be trusted.  Banks should not be allowed to retail regulated insurance products.

The FSA again has shown to have little or no control over the bigger banks.