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Small Business Demand For Loans Falls Unexpectedly - Telegraph

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http://www.telegraph.co.uk/finance/yourbusiness/8034396/Small-business-demand-for-loans-falls-unexpectedly.html

my intuitive guess says that the basket cases have maybe given in and hopefuly we have businessmen with a profit generating business plan now, not an expanding-debt-dependant one. any thoughts?

(a) Price of loan. If I can borrow at 0.5%, I will go in and borrow truck load and then buy government gilts. That is my business plan.

(B) Tax system does not really encourage risk taking, especially when the risks of failure is pretty high in this environment

© emploment regulation - easy to borrow and hire, but not so easy to fire. Further, most small biz loans needed to be secured

against bricks and mortar plus director guarantee.

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http://www.telegraph.co.uk/finance/yourbusiness/8034396/Small-business-demand-for-loans-falls-unexpectedly.html

my intuitive guess says that the basket cases have maybe given in and hopefuly we have businessmen with a profit generating business plan now, not an expanding-debt-dependant one. any thoughts?

Small businesses never got access to credit without a solid profit generating prospect. Getting a loan for property is/was far more likely.

"an expanding-debt-dependant one."

Never existed

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Small businesses never got access to credit without a solid profit generating prospect.

that isn't what sir alan sugar said last year

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http://www.telegraph.co.uk/finance/yourbusiness/8034396/Small-business-demand-for-loans-falls-unexpectedly.html

my intuitive guess says that the basket cases have maybe given in and hopefuly we have businessmen with a profit generating business plan now, not an expanding-debt-dependant one. any thoughts?

What is a good business rate these days?

When I looked into it I got quoted rates of 10%. Seem pretty steep to me.

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http://www.telegraph.co.uk/finance/yourbusiness/8034396/Small-business-demand-for-loans-falls-unexpectedly.html

my intuitive guess says that the basket cases have maybe given in and hopefuly we have businessmen with a profit generating business plan now, not an expanding-debt-dependant one. any thoughts?

IMO it's just a symptom of collapse in demand generaly

I have multiple suppliers begging for orders on a regular basis now; last saw this early 2008.

Ironically I have plenty big orders to place (£100K+ each) to fulfil customer demands but prices are too high, too sticky - suppliers all bitching about rising costs and commodity prices. I do have one supplier willing to discount (very large German industrial product manufacturer) turns out they hedged various commodities in 2008, so I guess that proves that inflated commodities are pushing product prices to unsupportable levels

Yet another case of QE fuelled speculation strangling the real economy

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I'd have thought people are simply less willing to stretch themselves, certainly if it means putting themselves into the hands of bankers.

I am incredibly happy that I wiped off all debt a while back; had I been where I was 7/8 years ago in the recent environment I have no doubt I'd have been done for. More good luck!

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IMO it's just a symptom of collapse in demand generaly

I have multiple suppliers begging for orders on a regular basis now; last saw this early 2008.

Ironically I have plenty big orders to place (£100K+ each) to fulfil customer demands but prices are too high, too sticky - suppliers all bitching about rising costs and commodity prices. I do have one supplier willing to discount (very large German industrial product manufacturer) turns out they hedged various commodities in 2008, so I guess that proves that inflated commodities are pushing product prices to unsupportable levels

Yet another case of QE fuelled speculation strangling the real economy

I never understand why companies do that. Their hedge is holding an open profit which they can realise without your trade, so why pass the value of that decision to you? You'd not be picking up a deficit had it gone the other way, would you?

I always believe in costing at replacement cost, which reflects the reality of the propsective trade.

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"an expanding-debt-dependant one."

Never existed

I'm not sure .. I think it's all a case of smoke and Mirrors .. I very much doubt if my bank would let me have any unsecured debt at anything less than the buisness overdraft rate. But one of my friends who has argueably a less sucessfull buisness has had huge loans from various banks, he told me that his buisness had debts of over £600,000 .. according to him it's all in the way you present it to the lender. You have to have a board of directors, a sales manager, a buisness developement manager etc etc and some bloke called Jeremy who conducted your pitch for you, filled in all the forms for the bank and charged you 1% to get you the loan ..

It works like this ..

Your buisness development manager (sisters boyfriend) writes a report that says that if you could reduce your prices by 50% for 6 months then your market share would increase to 60% ..

The board (You, the wife, brother in law, sisters boyfriend) decides to seek finance and it's duly mineted ..

The finance director approaches the bank, Jeremy does the forms ..

Loan is agreed ..

Wages are paid ..

Rinse and repeat ..

(remember this is a one man band type operation ..)

My understanding is that the banks are now going to visit companies applying for loans (possibly even asking about loans) and are discussing the options with people before they apply . .

I have heard of a couple of companies going down "Unexpectedly" recently .. so it might well be that the buisness enviroment is getting healthier .

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I never understand why companies do that. Their hedge is holding an open profit which they can realise without your trade, so why pass the value of that decision to you? You'd not be picking up a deficit had it gone the other way, would you?

I always believe in costing at replacement cost, which reflects the reality of the propsective trade.

Said supplier is not a commodity spiv - they have a substantial manufacturing cost base to support and are positioning for the long term.

They have a choice between banking a one-time speculative gain or levering it to keep the factories humming & customers buying while competitors go bust, which will ultimately support their sales markets just when things get really tough.

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Most businesses I know of are existing purely on cashflow and retained savings - mine own included. Why would I (or any other business) want to borrow money if they weren't certain it could be paid back?

I think companies are cutting their clothes in terms of debt-fuelled expansion because of the sluggish state of the economy.

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Given contracting demand and the soaring pound I am not sure this news was at all unexpected. Perhaps it was unexpected for those who think its all contained and there is no price to pay for the decade of madness.

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  • 245 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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