Further to my previous post, from the BBC:
... Mr Osborne said the government "will not tolerate banks piling the pressure" on small firms struggling for credit. "Every small and medium-sized company that I have visited in recent weeks has had some problem with their bank - either they have found it difficult to renew their overdraft or they demanded additional collateral, often someone's house," he said.
"The danger is that, particularly next year, when there is a huge amount of refinancing required, that the small and medium-sized businesses suffer from a lack of access to working capital."
Can you see where they're going with this?
The government is working on good excuses to do an 'extend and pretend' job and to allow UK banks to defer repayment of the hundreds of billions of pounds of taxpayer-backed soft loans and guarantees for another couple of years.
Not in order to keep the house price bubble inflated, y'understand, oh no, nothing as cynical as that, but to 'help small and medium-sized businesses, which are the lifeblood of the UK economy etc etc'.
FFS, if the Chancellor wanted 'small and medium-sized businesses' to have more money, he could cut out the middleman and just reduce their tax burden (and red tape), couldn't he?
Sunday Funnies...
40 minutes ago
7 comments:
Don't they have to start accounting for all the debt they printed under Maascrict rules if they do this?
How will they spin that one (or will they just put pressure on the EU to change the rules?)
A lot of businesses that complain about the banks not financing them are flaky as all hell. They either don't have a good idea, or are running with huge unnecessary costs (because the business is more of an ego trip).
I know a couple who started their own software business. I wondered how they kept going, considering how many conferences they went to. I found out later when they wound the business up because they'd run out of money.
S_L, they can bend the rules, can't they?
JT, indeed. If you gamble on debt to help you expand, then that's your gamble. It might pay off, it might not...
Even if you have a good, reasonably profitable business with a guaranteed monthly income that exceeds your outgoings they are all still not wanting to play. They are making a huge number of arbitrary judgements and charging an exhorbitant amount for modest borrowings, up to 7% over base.
I just think the spoutings by the BBA and the Government show just how much they are in bed with each other at the expense of the rest of us.
This has come about because the banks are now the only source of capital for businesses, since all the money that private investors might have contributed is tied up in overpriced housing. I am convinced this is not accidental.
L, there's anecdotal evidence on both sides. I'm not entirely convinced either way.
B, possibly true, but there is also such a thing as 'organic growth', just expanding out of retained profits. And even the banks have to get their money from somewhere (in present times, mainly from the government, that is true).
Mark, you're right, people and businesses are far too ready to rush into debt, but then the banks are going to encourage that, aren't they. To my mind, the rush into indebtedness all started with the invention of the credit card. "Take the waiting out of wanting" was the slogan. Before that, you saved up to buy things, or bought them on the "never never" (a self-explanatory expression).
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