What is it?
It does it what it says on the tin.
It’s a transparent fixed fee service for providing independent legal advice on bank loan guarantees.
Guaranteeing a bank loan agreement – the legal advice you need
If you are acting as guarantor on a bank loan, you will probably have been told by your bank to get independent legal advice – because they need to ensure that you fully understand what you are signing and what the implications are for you, your family and your business.
Furthermore, whilst this type of independent legal advice is normally a bank requirement, please do not underestimate the real need for this advice – it’s not a formality, nor just witnessing a signature.
Independent legal advice
Even if you have been referred to us by your bank, rest assured that the advice we provide in relation to any bank guarantee is entirely independent.
What our advice covers
One of our team will meet with you in person, in the absence of the borrower, and discuss the following:
- the nature of the documents, and the financial risk you face if the borrower’s business fails, including the possibility of bankruptcy;
- the seriousness of the risks involved – with reference to the purpose, amount and terms of the new facility and whether you understand that other assets may be at risk to cover repayment if the business fails;
- the fact that the lender may alter the terms of the loan including increasing the amount borrowed without reference to you;
discussing whether you wish us to negotiate with the bank on the terms of the transaction (e.g. limitation on the amount borrowed);
- explaining that you do have a choice on whether to sign the documentation
Our fixed fee charges
Our simple and transparent fixed fee charges are proportionate to the amount of time involved in advising you, and to the size of the loan. Our charges are as follows:
- Basic Fee – £500 plus VAT [for loans up to £25,000 and up to 2 Directors]
- Larger Loans Above £25,000 – £500 plus VAT plus 1% of the loan value over £25,000.
- Additional Directors – when advising more than 2 Directors there is an additional £200 per Director plus VAT.
So for example, say the loan involved is £75,000, then our fixed fee charge for advising two directors would be £1000 plus VAT [the basic £500 charge + £500 representing 1% of £50k, the additional sum of the loan over £25,000].
How it works?
- You know what the fee will be in advance.
- You book an appointment.
- You meet face-to-face with one of our lawyers [usually at our Salisbury office, but we offer appointments in other locations subject to availability]
- We confirm our advice to you in writing.
It’s that simple.
Please note, however, that we do not provide this important advice by phone or email – so you will need to organise a face to face meeting with us in one of our 4 offices in Salisbury, Andover, Fordingbridge and Amesbury.