Bankers with their snouts in the trough again

[Milky]

Seems the banks are trying to profit out of the crises.

Having received money from the government they are refusing to pass it on to small businesses. Instead they are demanding that business owners take out secured loans with interest rates of up to 30%.

[Observer II]

An argument for public executions ?

[Bill]

My understanding on this is that the government hasn't given the banks any money, but simply told them to not to create obstacles for businesses applying for emergency interest free  loans. I thought the government offered some guarantees on this but banks being banks are probably being overly cautious by asking for further guarantees, which is exactly what they were told not to do.  I've just started the ball rolling in applying for a small business grant for my business and there was absolutely no red tape. 

 

Bill

[Davy51]

From what i heard yesterday, banks will only stump up these interest free loans when the applicant has tried everything else  even to the extent of personal financial ruin.

[Bill]

They shouldn't be doing this. Back in the crash of 2008 the government via us the tax payer had to bail out the banks so now the banks need to return the favour and help out the country. These loans though are intended for larger business only and the larger companies would normally have sufficient assets that could be used to secure such a loan. For example, if Richard Branson went in and asked for a few million to cover his bar bill, it wouldn't be that unreasonable for the bank to  ask for one of his planes as security even if the government has made overall promises.  

 

Bill  

[Milky]

4 hours ago, Bill said:

They shouldn't be doing this. Back in the crash of 2008 the government via us the tax payer had to bail out the banks so now the banks need to return the favour and help out the country. These loans though are intended for larger business only and the larger companies would normally have sufficient assets that could be used to secure such a loan. For example, if Richard Branson went in and asked for a few million to cover his bar bill, it wouldn't be that unreasonable for the bank to  ask for one of his planes as security even if the government has made overall promises.  

 

Bill  

So you run a larger company Bill  I would have thought a IT company such as yours would not be effected too much, although what do I know!

I wonder what constitutes a large business?

Richard Branson's won't own any planes. Most large companies won't own any assets, there will be a web of companies that own parts of the company thatt own other parts that own yet other bits and assets will be leased, often from businesses owned by the same organisation but are separate businesses.  I know that is true of Virgin Atlantic. I recall when I was in business, big companies go bankrupt, but their owners wouldn't be effected, they would have other companies that would continue often from the same base.

 

[Bill]

Milky.

No my business is classed as small, with only a dozen or so staff but we are affected quite badly. No taxi driver can work, so they just hand back their devices to the company, who then have zero income and can't pay us. If our income came solely from tech support charges, we'd be OK, but we buy expensive equipment outright then allow taxi companies to pay for it over one or two years. If they fail, we simply loose this money that we've effectively invested and there's little that can be done. Our biggest concern though is that all the equipment contains special data sims and although they're not being used, the company that supply's these will still ask us for payments. (a bit like having to pay for a contract phone even when you stop using it) and we have tens of thousands of these. 

Running a business as you know often involves taking calculated risks but I doubt many could have anticipate the affects of a global pandemic, I know I certainly didn't.  But we'll get through this, and while there won't be any rewards for a while, at least with luck and help from the government, the business can survive and my staff will still have their jobs when it's all over. 

 

Bill