A FORMER Bolton banker is warning businesses who were sold 'tailored business loans' to investigate as they begin to come under scrutiny.

The loans, which were sold by several high street banks including Clydesdale and Yorkshire Bank between 2001 and 2009, were agreed on the basis of creating a fixed rate loan tailored to the individual customer.

Earlier this year, David Thorburn, the then CEO of Clydesdale and Yorkshire Bank, was questioned as part of the Treasury Select Committee on SME lending.

Claims that businesses were not told of the facts before the products were sold, and that they were sold to customers who had no understanding of their mechanics and in many instances were unsuitable, were made during the hearing.

Now Dave Jones, managing director of Bolton’s Progressive Business Mentoring and a former regional commercial banking director, who has been heavily active in seeking recompense for miss-sold Interest Rate Hedging Products, is warning businesses who took out the loans

He said: "TBLs, unbeknown to the vast majority of customers, utilised an "embedded" interest rate product linked to Libor, to mitigate the Bank's losses arising from rate movements in the money markets.

"Customers signed up to an apparently simplistic product, only to learn at a later stage that extricating themselves from the loan would expose them to substantial and unaffordable break costs which, in a number of cases, were never brought to their attention."

A businessman who ran a Dorset based weddings firm has joined with more than 100 other small businesses in a legal battle, after claiming that taking out the loan destroyed his business because he had to pay more than £750,000 to switch to a cheaper deal.

Following the hearing in Parliament, the Clydesdale and Yorkshire banks agreed to initiate their own 'internal complaint led review', which has resulted in financial redress for a number of SMEs.

Michael Slater, head of litigation at KBL Solicitors, said: "There are strict time limits for the issue of court proceedings and there is a real danger that for many TBL customers they may be out of time to protect their legal rights.

"Further, given that the review of TBLs is a voluntary process, many SME owners may still be oblivious to the fact that they can request a review."

He added that businesses can still request a review even if they have repaid their loan.