Firms Struggling To Get Government Guaranteed Loans

[interestrateripoff]

http://www.guardian.co.uk/business/2009/ma...-loans-business

Many companies are struggling to get loans through schemes introduced by the chancellor Alistair Darling to help firms hit by the recession.

Some of the Enterprise Finance Guarantee (EFG) loans – where the government provides the security – have been denied because companies are considered loss-making, rather than suffering a blip, or because owners are judged too rich.

Ken Jones, head of Advanced Aluminium Designs, a Suffolk-based firm that employs six people, was denied a £50,000 EFG loan by HBOS because he had assets – in his case his home.

"I was too rich in assets – you have to be broke to apply," said Jones who needs the funds as cash flow.

Jones even considered resigning from the board, leaving his business partner, who doesn't own a home, to apply for the loan. It is, he said, "ludicrous".

HBOS offered a straight £50,000 loan, on condition that Jones put up his home as collateral, a process that would have cost £5,000 in charges. Jones rejected the offer and switched his account to the Co-operative Bank.

The Co-op offered £50,000 if Jones opened his account with £18,000. "It's a third of what we want to borrow – what's the point?" Jones says.

Jones also tried to re-mortgage his £350,000 home, seeking £30,000 on £200,000 of equity. The application was rejected. "Getting a loan is bloody impossible," he says. "Our company is impeccable, we've never been overdrawn. If I can't get a loan, who can? It's been a nightmare."

Anyone else finding it difficult to get govt aid?

No surprise that the govt has made is to difficult no one qualifies.

[Abstra]

I'll lend you a fiver for 50% of your bussiness and some sexy picky's of your wife. How does that sound. International P*** Taking Bank.

[lowrentyieldmakessense(honest!)]

http://www.guardian.co.uk/business/2009/ma...-loans-business

Anyone else finding it difficult to get govt aid?

No surprise that the govt has made is to difficult no one qualifies.

i dont wont no aid from the govt

any tractor manufacturers

[aliveandkicking]

http://www.guardian.co.uk/business/2009/ma...-loans-business

Anyone else finding it difficult to get govt aid?

No surprise that the govt has made is to difficult no one qualifies.

Surely there is no way a secured loan of 50000 is going to cost 10% in fees??? Something does not add up here i would guess.

[R K]

Bu bu bu bu but what you have to understand is that it is the system, the system not the government.

I say to you that I am working from the minute I get up in the morning to the minute I go to bed at night to ensure the system is working properly on behalf of the hardly working families of this country.

What would happen if there was an election? Chaos

[STRLondon]

I think it just highlights the problem, before, the banks would give anyone a loan, because the economy was strong, you could make a profit no matter what you did. Now, well, you need a proper business plan, the banks are going through a shock period, thinking... well all our other loans went bad, if our future loans go bad, then we are toast.

Good stuff, credit is ponzi economy. Borrow a bit, make a profit, borrow some more, make more profit etc.

Not, borrow 1000% your capital and leverage up infinium.

[OnlyMe]

We don't have Banks any more, just housing linked junk merchants or reckless credit merchants.

That is why business in the UK is so scuppered and why the UK has underperformed so appalling in sustainable business creation in world markets. A few get out by sheer bloody mindedness or talent, quite a few have been given a knees up and either used it or squandered it from stockmarket investors. The rest - businesses primed on housing based loans and sod the rest if you have no "housing equity".

Epic fail to come if this carries on. Propping up the very useless banks with taxpayer money is the very worst thing that could be done.