British businesses have seen no changes in bank attitudes to lending to despite the Coalition's claims that it had brought the banks into line. In February, "Project Merlin" promised to increase lending to smaller firms by £10bn to £76bn as part of a wider deal with the banks, but a survey by Hotfrog found three-quarters of …
"Around 41 per cent of business owners said they'd use their savings if they needed fast access to finance."
Does this mean that 59% of business owners don't have a penny to their name?
Or do they have savings, but they expecting a bank to invest in a business which they aren't prepared to invest in themselves?
Either way, I can sort of see why the banks might not be interested.
So in your world... loans are surely non existant? either everyone uses their own savings for everything or theyre not worth investing in?
Also, if you perhaps set up a business, would you not want some personal savings for when it (probably) all goes tits up?
don't have a penny to their name?
Most small businesses run pretty close to the wire. There is always something that needs replacing or upgrading to eat up your petty cash.
When you only have one or two people working for you, adding an extra one is a not inconsiderable expense. One that will probably pay for itself pretty quickly, but never the less, you still need the cash to do it to start with, or there just wasting space.
Not objecting to loans
I think that is my exact point. If someone has savings that they don't want to invest in their own business because they want something to fall back on when the business goes tits up, then they are probably not worth investing in.
Would you risk your own money on someone like that?
Eggs in a basket
Yes, it shows financial prudence and objectivity. If someone is betting their house and kids on a business they're an idiot. It's cheaper and safer to bet with other peoples money (the banks).
It's all arse about tit anyway, if a bank isnt willing to invest in you, theres probably something wrong with your business plan.
As previously mentioned, most small businesses are very, very close to the wire. Lots are started up with savings and then need loans to grow - in this instance the owners dont have personal savings to draw upon.
You can have the best business idea in the world, but if you dont have savings you wont get anywhere - largely because people take the view that if you wont invest yourself, its not worth it. This is not always true.
Also, business structure counts. It can be far from easy to use your own funds to grow your own business as this has to be brought in and accounted for properly (you dont want to be money laundering, do you?) - it may even result in significant tax increases if you move it into your bank account without due care.
Basically, the bail out was (partly) justified by banks promising to increase what they gave back to society. Instead they have kept it themselves.
The fact is the risk likes with the public but all the rewards lie with the bank. Does anyone think that is right?
Mutually exclusive requirements
The banks MUST be compelled to stop lending money out willy-nilly, and they also MUST be compelled to lend out more money to anyone who wants it!
We're in this mess because people over borrowed and you're wondering why banks now have much tighter restrictions on lending...
But the people they lent to were different.
In the US they were people with no income and no credit, and in the UK they were loans and credit cards which assessed people as being able to make repayments which were more than their wages (if any).
They were also mortgages backed up by endowments with faked performance, leading to them being worth about 50% of their projected minimum worth.
The mess was not caused by banks giving loans to businesses or private individuals who had some visible way of paying them back.
Lies, Damned Lies and Statistics
Comment on the article and the research:
"Researchers spoke to 500 companies and found 75 per cent had seen no change in banks' attitudes to lending.
You surprise me - of those 500, how many were actively seeking additional funding? What were they expecting, their bank manager to phone them up out of the blue and offer them more loans? How many were bitter at being turned down? What about those that did receive loans?
"Some 70 per cent of respondents said better access to funding would allow them to expand their businesses and hire more staff."
Of course they would. Doesn't mean they are in the business position to be ready to expand. Every single entrant is Dragons Den expects that additional funds "will send their company global". Doesn't mean their business plan is worth the paper it's written on, hence so many not getting investment.
A straw poll of 500 companies hardly allows a conclusion to be drawn.
Perhaps the real answer can only be found by forcing the banks to publish the number and value of the loans they make. Oh, wait, they already do that.
You must remember that banks do not exist to help you (or me), they exist to help themselves (to lots of money). We have just had our review by our bank - and they doubled the standard (minimum) fee they charge, even though we actually used them less last year (turnover was down). No discussion, no negotiation, just doubled. Do we want to use them for more borrowing? Not really. Are they taking advantage of the current climate? You bet.
bunch of cnuts
my last company went under due to Natwest fucking them over (withdrew 200,000 from overdraft, which meant we missed orders, which meant we made a loss instead of the usual tidy profit)
end result. 20 people made redundant, 5 of us started up a new company. how much has that cost mr tax man?
then i go into natwest to get my account to be a joint account (married last year) and they have the audacity to ask if i want a review as 'they are here to help'. brilliant. yes please. can i take advice from a company that lost 50 odd billion over a the last couple of years! this is the same company that tried to charge me £25 for not paying the <£1 i had outstanding on a credit card. that i had cleared the balance of the month earlier (hmmmm how did that 75p get there?)
surprise surprise, this gov is just as useless as the tw@s that were there last time.
Call me cynical but...
You could think that our political leaders had some sort of personal connection with the banks.
Let's put a positive spin on it?
COALITION FAILS BUSINESS ON BANKS
COALiTION SERVES BUSINESS TO BANKS
There! That's better!
You know us big earners have got to retain our leverage otherwise oft we go!
Now then, talking about positive spin, where is Mr Lewis and that engineering person with more than 30 years experience when they are needed?
In a radiation shelter on a diet of words be they?
Shame really, Banks and Coalition seem like apples and cheese, fish and chips, beer and crisps, ...
Talking of unique pairings, ...
Now then Mr Page and Mr Engineer:
How about a loose then sequenced use of aggregates?
Maybe a mixture of builders sand a grit sufficiently light to get pulled along with the flow but sufficiently bulky to get trapped. And once successful (evidence: reduction in flow) a polymer top up with same aggregates (sand and grit) maybe even some 10 mm to dust limestone?
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