Chit Chat
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When Sunak brought this out last month, he said the government would guarantee these loans to the banks. However the banks are looking at these in normal business transaction loans, ie, last 3 yrs accounts, 12 months cash flow projections.
I spend half my day doing cash flow projections, but how can you do proper cash flow projections when you don't know when businesses will be operating again.
TBH, I don't know if its the banks being their usual fecker or if its the government haven't fully sorted this out yet. Its a fiasco and needs sorted or a lot of business will go under and a lot of these furloughed workers won't have any jobs to go back to.
I spend half my day doing cash flow projections, but how can you do proper cash flow projections when you don't know when businesses will be operating again.
TBH, I don't know if its the banks being their usual fecker or if its the government haven't fully sorted this out yet. Its a fiasco and needs sorted or a lot of business will go under and a lot of these furloughed workers won't have any jobs to go back to.
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Sorry, these aren't grants, per heading, just loans to be paid back at a supposed reduced interest rate, but read into that as you will also.
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Assuming not enough security in the company you can get pretty much whatever loan you like if you put up a personal guarantee, I suppose the issue is should the bank and government be taking all the risk during this time.
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I get your point crisp, but the government promised up to 25k for profitable, soluble companies to keep them going through no fault of their own. There is gonna be admin issues with banks etc... But 3% of loans approved after 4 weeks or so is just not good enough and many fine companies will go to the wall unfortunately and the unemployment that ensues.
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to quote those on here regards the elderly
one might say that any company in trouble within 4 weeks of a lockdown would have died anyway at some point, zombie companies been kept alive  |
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Banks only lending to investment grade businesses
Banks NOT willing TO GUARANTEE the 20% burden the government have currently insisted Wont be many companies risking that with PERSONAL guanteees from the owners necesssary  |
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Yes, the banks still have to underwrite 20% of the loan.
Germany started from this position, quickly realised it wasn't working and changed it to a 100% guarantee. Once again, the UK is found wanting. CBILs faulty! |
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daily mail,torygraph spend 12 months of year advising people to always have 6 months worth of cash on the hip for any emergencies ,but think its ok for companies to run out of cash in a fortnight even when government are paying their workers, you cant argue with banks taking their time ,digging in to companies who are on the verge of going bust after less than a month, they tell us millions of firms on the brink , millions of 20%,s soon add up
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They shouldn't be loans through the bank. The government should just put out some grants for certain sectors and make the banks go interest only on loan commitments. I just can't understand how a bank can give a loan taking into consideration responsible lending conditions to help with effects from covid when they don't know when the crisis will end.
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I think the government think a 100% guarantee could translate to a massive increase in fraudulent application similar to mortgage fraud during the housing market bubble. But the banks can be more vigilant and proactive eg have more loan assessors on the ground? The companies need the money today or very soon, not in 3 months' time.
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What criteria do you think the banks should be using, Deplasterer ?
As Rishi said yesterday, 80% of this is our money, not his. It can't be a blank check. It can't be that difficult to do a projection in the line of the OBR's for example, based on the nature of the business. Presumably they want to see there is a plan in place should some sort of normality be restored. 100% government would be a nonsense in the UK, why would the bank have any incentive to chase the money. I assume the 20% is there to keep the bank interested in managing the asset. As you'll know it's far too easy to bankrupt a business, write off liabilities, change the name slightly and start trading again as it is (in normal times). |
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As impossible mentions the businesses need the money now. The majority of money that will come out from the banks loans will be to businesses that don't need it as much as the ones that do as they will be easy credit applications. The businesses that really need the support will be made to wait or end up not getting it as the banks are lending on their criteria and not a government / public one aimed to keep the businesses going that wouldn't have failed in a normal environment.
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Just seen on the bbc that india has relaxed its lockdown on farming, banking and public works. No doubt the approved loans for the uk will surge in the coming days as it becomes apparent how much of the banks have 'outsourced' their credit teams for lending decisions and customer service. No doubt this was a major element in very few loans too.
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Everyone gets that, plenty of organisations want funds like, yesterday. As I've posted before, we're dealing with reality. People need to take a leaf out of Captain Tom's book, and stop with this incessant moaning.
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