Jump to content

Lend and spend?


observer
 Share

Recommended Posts

I can understand a higher interest rate - or some form of insurance backed guarantee - being charged for finance to an unproven startup company.

 

But an established company who may have won a large contract and need to invest in new equipment in order to deliver it and grow their business getting charged 13% per annum on a capital investment is ridiculous.

 

There are also many machinery manufacturers who need bank finance to enable them to manufacture to order large machines which are then leased out to customers (often because the customers can't get reasonably priced finance to buy the things outright!). The lease income often totals several times the purchase price of the machine over it's lifetime - and also gives the manufacturer the opportunity to sell lucrative engineering services, spare parts and consumables contracts to maintain the machine and keep it running. But if the manufacturer can't get the finance to build the thing they can't make this money on it - AND the customer can't get their hands on it to enable them to compete in their marketplace.

 

The result is foreign manufacturers who can get finance backing for their lease deals get to sell their machines into the UK, and they get to make all that money on the spare parts and consumables for the next 10 years or so.

Link to comment
Share on other sites

"Unsecured" loans are very rarely made to businesses. They're only really commonly made to consumers.

 

There's always far more detailled investigation into a companies credit worthiness and ability to pay back a loan - or even an overdraft - than has ever been applied to individuals.

 

Plus, businesses get charged a fortune every month for simple banking facilities which Joe Public gets for free.

Link to comment
Share on other sites

Well, given the retiscence of the Banks to lend to buisiness and the Governments obvious eagerness for them to start lending - would it be better if the Gov just taxed them and diverted this revenue via a buisiness lending scheme? :? Perhaps Alan Sugar and his Dragons could run it! :wink:

Link to comment
Share on other sites

Errm not really Asp: there are several ways of providing for the "public good" and contributing to the well being of society and it's economic progress - one is a progessive tax system, based on the principle of the provision of services based on the democratic will of the people and funded by mandatory taxation. The others rely on some form of charity or patronage, and depend on the will of the individual donors - by any standards, a bit hit and miss. :roll:

Link to comment
Share on other sites

Contrary to popular belief, the UK's manufacturing sector is not dead. In fact, we are still the 6th largest manufacturer in the world by value of goods manufactured.

 

We can only ontinue to stay ahead of the developing economies with their plentiful cheap labour pools by investing in the newest high-tech machinery. That's a very capital intensive business and is not possible without access to affordable business credit.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

×
×
  • Create New...