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Coronavirus: Crawley businesses urged to check type of loan before borrowing

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Small business owners have been urged to check the type of loan they are signing up to before borrowing against their personal assets, as many have unnecessarily secured personal assets to the future of their business.

Despite the government offering to guarantee interest-free and charge-free loans, which are to be offered by as many as 40 of Britain’s biggest lenders, some banks continue to offer business owners their standard, and more expensive commercial loans, which are secured against their personal property.

Although some banks have said they will stop demanding personal assets, such as property or savings as collateral, the question still remains whether those that have already signed up for this financial help will be able to uncouple their hard-earned assets.

Oliver King, an associate solicitor in corporate law at Langleys Solicitors, said:

“Businesses that quickly found themselves in trouble, due to the current economic situation, may have already taken out loans, and have been obliged to provide additional security and personal guarantees by lenders, which could come back to bite them at a later date.

“Following pressure from the Institute of Directors to stop this practice, we urge the banks that have taken personal guarantees to do the honourable thing and waive the guarantees, rather than punish already hard-pressed SMEs.

“This would need to be a voluntary act by the banks, and one that continues on the current wave of goodwill we have seen in recent weeks, to avoid punishing SMEs further down the line.

“It remains to be seen whether, as the Treasury has indicated they expect, all of the lenders on the scheme to drop the requirement or not.

“There have also been calls for a similar scheme to be opened up to smaller, challenger banks that specialise in lending to SMEs, making them agile enough to make swift decisions, something which is certainly required in the present climate. As well as separate calls to open up the Coronavirus Business Interruption Loan Scheme (CBILS) to all businesses with turnover of less than £45m, as opposed to just those businesses that cannot access other loans.”

“It is essential that any small business looking to benefit from the government’s support programme looks into the details of the loan scheme being offered by any lender, extremely carefully. If directors are in any doubt then they should take immediate legal advice on the implications of the terms being offered to them.

Greater adoption of video call facilities

“Further to this, we may see a development in the way high street banks deal with legal advice. Any individual providing security or a guarantee on behalf of a third party, must obtain independent legal advice on the form, content and effect before proceeding. This absolute requirement is almost never waived, and is done to ensure that the guarantor is under no undue influence or duress to provide the guarantee.

“Previously at high street lenders this has been obliged to be done via a face-to-face meeting. However, in recent years, challenger banks and forward-thinking lenders have permitted this advice to be provided via a video conference call, something which the larger, high street banks have not yet adopted. Although I expect high street banks to miraculously now realise that this can be carried out over the telephone or on a video call and update their practices.”

Business

What to expect when Primark reopens in Crawley in two weeks

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Primark is working re-open their stores on the 15th june and the store has been working hard to ensure their employee and customer safety is their highest priority.

So what can customers expect to find implemented when they reopen?

Social distancing:

There will be a limit on the number of customers allowed in store at any one time to allow for the appropriate distance in between customers and employees, following government guidelines.

There will be clear signage and floor decals, as well as dedicated employees and additional security staff, to guide customers through the store in a way that limits contact with others.

Every second till will be closed to allow more space between customers and between employees.

The store will temporarily close off fitting rooms and customer toilets.

Personal protection for employees and customers:

Hand sanitiser stations will be made available at the entrance and on the shop floor and back of house for employee and customer use. Face masks and gloves will be made available to all Primark employees.

Perspex screens have been installed on tills to protect customers and employees.

Increased in-store cleaning:

The frequency and rigour of store cleaning will increase, particularly around high frequency touchpoints such as tills, escalators, lifts, and employee areas in back of house.

A basket cleaning system is also being introduced.

Primark CEO, Paul Marchant, said:

“As we re-open our stores in England, nothing matters more than the health and wellbeing of our colleagues and customers.

“We have really missed our customers and we are delighted to be back on 15 June and able to provide them with the quality, affordable products they love from Primark.

“We know that life for our customers is going to look different for a while. We want our stores to be safe and reassuring places to shop and work. While it might take a little longer to get into our stores, once inside, customers will find all their favourite Primark products and we have worked hard to make sure that clear signage and extra help will be there to guide them through the changes we have made to allow for social distancing.

“We will adopt all government safety advice as a minimum in our stores and have benefited from our experience in the other markets in Europe where we have already opened successfully. As we open, we will continue to look at best practice across the retail sector and amend our measures appropriately.

“I would like to thank all of our colleagues and partners for the commitment, strength and resilience they have shown through these challenging times.”

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