PM in vow to entrepreneur

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Friday, November 21, 2008
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This is Leicestershire

The Prime Minister has promised to investigate the case of an award-winning entrepreneur who blames her bank for forcing her to the brink of bankruptcy.

When the credit crunch hit, Bernie Taylor, who runs the Mulberry Pub Company, in Melton, turned to her bank, HBOS, for help.

A 2005 businesswoman of the year, she said she had never missed an interest payment, never exceeded her overdraft or broken any of the rules of her bank.

However, rather than offer her support, she said the bank started calling in debts, threatening the business, her staff's livelihoods and even her home.

She said it was all the worse as the same bank was recently handed a lifeline from the Government in the form of billions of pounds of tax-payers' cash.

Her story has received national interest after Tory party leader David Cameron brought it up in Parliament. Now, the Prime Minister has said he will look in to the situation personally.

Mrs Taylor, a 50-year-old mum of two from Burbage, said: "Throughout this situation I think the bank has behaved in an incredibly underhand way. HBOS has been given all this cash despite the fact that they were questionably handing out so many unviable mortgages.

"I feel as though HBOS are forcing us into administration so they can make their balance sheets look good."

Two years ago, the group ran four pubs, but bad summer weather and the credit crunch saw them lose £200,000. They lost a further £75,000 when they had to walk away from the lease on one of the pubs.

She said HBOS advanced them £150,000 on the condition that she sold two of her remaining three leaseholds – which she did at a 60 per cent loss.

A chunk of the £150,000 was eaten up by HBOS transaction charges and the bank would not let her keep the proceeds of the sales to put back into her final pub – The Red House, in Nether Broughton, near Melton.

As HBOS got into trouble, Mrs Taylor claimed the bank became more difficult to deal with – and refused to let her re-mortgage her home.

She said it then withdrew her company's overdraft and removed takings from the business account, resulting in cheques bouncing and more charges.

Mrs Taylor said: "Our final pub is still a profitable business – if HBOS allowed us to refinance we could move it forward."

An HBOS spokesman said: "Bank of Scotland has been very supportive of its customer, Mulberry Pub Company.

"We have worked tremendously hard with Mulberry to explore all possible solutions for taking the company forward."

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3 Comments

  • Profile image for This is Leicestershire

    by CJ, Leicester

    Friday, November 21 2008, 3:23PM

    “How many small businesses this year have folded? I hate to think on the facts and figures. I heard the PM question time and this case was brought up and the PM, he only wants to look into it so he looks like he is an acting/caring PM to win votes!
    This case is no better or worse then anyone else in this predicament!”

  • Profile image for This is Leicestershire

    by Steve B, Countesthorpe

    Friday, November 21 2008, 2:45PM

    “Reading some of the stories in the press, and indeed hearing what I hear first hand from other business owners leaves me thinking that I must be very lucky. I run a small business in Leicester (10 employees) and so far I've always enjoyed excellent support from my bank (HSBC).
    I'm not passing judgment on this lady's business, but on the basis of the limited information in this story, I'm not entirely surprised that HBOS are reluctant to provide further lending to a small business which had already managed to lose over a quarter of a million quid in just a couple of years.
    It could be argued that not allowing her to re-mortgage (and thus further risk) her own home to invest in (or would "prop up" be a better expression?) the business was actually a very sensible and responsible move by the lender.”

  • Profile image for This is Leicestershire

    by vic, leicester

    Friday, November 21 2008, 1:07PM

    “Whilst i sympathise with this lady, unfortunately the business is a casualty of the global recession. I am a business owner, just over a year now, and it is a daily struggle to keep going- I bet i won't have a helping hand from the PM.
    As for the banks, this is all the thanks we get for bailing them out, but this is what they do- prey on the unsuspecting and in need. They should be ashamed with themselves the way they conduct their business.”

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