Hospitality industry common victims of interest rate swaps mis selling
Hotels and other small and medium sized hospitality businesses have been one of the primary industries affected by interest rate swaps mis selling.
At a time when interest rates remained on an upward spiral, many small and medium sized enterprises (SMEs) were sold complex interest rate swaps. These hedging products allowed the business to “swap” their variable rate for a fixed rate thus protecting them against rising interest rates.
However, following the financial crash, it has become increasing evident that lenders failed to provide a full explanation of the associated risks, namely what would happen if interest rates dropped, as well as neglecting to make client s aware of the substantial exit fees.
As a result many businesses, including a sizeable number of hotels and others in the hospitality industry who’s trade can be largely seasonally based, have been left with crippling repayments and the very real threat of bankruptcy; the penalties of breaking the agreement leaving them little other option.
If you are a hotel owner, or in fact the owner of any small or medium sized business, who has been sold an interest rate swap, we may be able to help find you a solution including acting to have your fees frozen while your case is under review.
Content correct at time of publication