Banks 'must lend to small firms'

[Power Lunch Club]

Never a truer word spoken

We really are all in danger here....I am waiting to get paid by several firms....who all have cashflow problems, they are not being paid, there not paying their suppliers, and several can't get short term overdrafts or llong term finance for bigger projects. Have they no idea what they are doing by not lending?

Businesses are going (not going too go later but now) insolvent....not because of lack of sales, but cashflow.

My accountant always says the three most important things in business are....Cashflow, cashflow, cashflow!!!

BBC NEWS | UK | Banks 'must lend to small firms'

The Lid Dem leader Nick Clegg talks about other outlets for funding even the possiblity of the goverment setting up a new bank...something I said was need for some time.

 

[davidc]

You are right. The 2 biggest problems at the moment are lack of liquidity and consumer confidence. Even companies with cash reserves are slowing payments to extend their survival times, as this situation keeps getting talked down all the time. The banks will have to start lending again otherwise this could spiral out of control.

 

[Power Lunch Club]

You are right. The 2 biggest problems at the moment are lack of liquidity and consumer confidence. Even companies with cash reserves are slowing payments to extend their survival times, as this situation keeps getting talked down all the time. The banks will have to start lending again otherwise this could spiral out of control.

Thanks for that David...I personally think it already is already out of control!! Business is willing, banks are being uncooperative and governments lack any balls with with to beat them up and get acting....heck the government (=we) already own then....why can't they do as they are told!!

 

[Former Member 1]

Trustee Savings Bank - Wikipedia, the free encyclopedia

Building society - Wikipedia, the free encyclopedia

Demutualization - Wikipedia, the free encyclopedia

The banks don't HAVE to do anything.... And that’s the problem...

For instance (from that Wikipedia page); in relation to the demutualisation of the building societies....


"A movement arose whereby investors would open a savings account with a mutual building society, thereby getting voting rights in the society, and
pressurise for a vote on demutualisation, with the intent of getting a windfall payment as a result. A number of societies' members and managers were very unhappy about such investors, who were termed carpetbaggers, maintaining that as mutual societies, they could supply better and cheaper home loans than the banks and demutualised societies, as they only had to make a profit to cover their operational costs, and had no need to generate an additional profit to return to shareholders."


....They only had to make a profit to cover their operational costs.

And there’s the rub. When the Building societies were demutualised. When the water electricity and gas boards were privatised, when GPO telephones was mutated into BT you added another variable to the equation...

Profit, for the benefit of Shareholder and management and as much of it as possible. And no matter how you twist and turn that profit is an extra mouth to feed. And that mouth can only ultimately be fed by the consumer. And as these are essential things for modern life the consumer has no choice but to feed that ever more hungry mouth.

Much as my instincts are to rail against state control and interference the crisis we face today is the inevitable result of destroying the order and control that existed within these core services. Clearly at the heart of each of these things was what is essentially the core of a commercial organisation. But those organisations only existed to serve what had become a core function of society.

At the heart of the problem is the simple fact that what was created and run for the benefit of the many is now possessed by and benefits the few.....
No the banks DON’T have to do anything. Because at the heart of their interests is the greed of individuals and perversion of the purposes for which these institutions were set up in the first place....

The only way forward here is for the banking and other core industries to come under massive change. Whether that comes from changes in the law that effectively re-nationalise and re-mutualise them. Changes from within that do the same. Or the collapse of the current system and riots inthe streets..

But right now the banks don’t HAVE to do anything.... Which is where the problem lies!

 

[davidc]

I must admit that last August when this situation started I thought here we go again. I have seen 2 recessions before, and you just tighten the belt and trade out of it. This time I must admit it is very different with problems in so many areas and countries. Unfortunately we are living in a once in a lifetime event. We live in Spain, and literally every day I hear about another business going bankrupt. The locals here have never had this before as even the pensioners are skint because the pound is almost on a par with the euro. I deal in property, and the market stopped as quickly as a tap being turned off. i have contacts in America, mainland Europe, and all round the UK. I would love to talk to someone positive, as that has not happened in weeks. I partly blame the media as well. It creates a dilemma. Should the media be "encouraged" to be more positive? This then infringes on free speech which I am sure we all believe in, but again looking at the big picture, the media is largely responsible for the doom and gloom. Unemployment is rocketing at the moment, but most people are still in employment, and will remain so. Every day people are told on tv and in the newspapers that the end of the world is coming. Every day people are being programmed to just sit in their houses and save every penny they have. Unfortunately bad news sells........We are now facing a depression, and not a recession. Do governments borrow huge sums of money to shore up economies, and then face years of high taxes to recover, or let the markets crash quickly, and then hopefully recovery will be quicker? Sorry for harping on, but I feel so sorry for the pain this is going to a lot of families around the world.

 

[Scottish Business Owner]

David,

I dont think your harping on, it's a feeling i'm sure my people are experiencing at present. This is the first time I have really went through this in the sense that we have bills coming in and mortgages to pay etc.

It's a vicious circle because what the economy needs is for people to spend to instill a bit of confidence in the economy. With people losing their jobs etc most people simply aren't spending so this puts pressure on retailers etc.

Given that I work in a commercial environment I feel I also have to point out that not all banks are not lending. Some still are and have appetites to do deals (albeit the right ones!). There are some small signs that things are picking up, mortgages for one have went up slightly over the past few months. With the private sector not spending the only thing the government can do is to ramp up public spending and borrowing to try and give the economy a kick.

 

[Scottish Business Owner]

A really interesting article today on the BBC website regarding the above which helps to explain a little about what issues the banks are having. The main point seems to be that this £37bn recapitalisation hasn't actually been given to the banks yet.

There's also calls from some quarters to name and shame the banks who are not lending.

BBC NEWS | Business | Banks 'must kick-start lending'

 

[Power Lunch Club]

Oooo....Darling, I love it when you are so forceful

And about time too!!

BBC NEWS | Politics | Darling 'to force banks to lend'

 

[TomB]

its about bloody time too!

I mean the banks quite happily took a £37bn handout from us why shouldn't they be forced to return the favour.

It should have been a clause in the money anyway if you want the money they you have to lend to the public.

makes me so mad :cursing:

And don't even get me started on those greedy, lazy energy companies. :cursing:

T

 

[Scottish Business Owner]

Just trying to bring this back to people's attention. There seems to be signs that lending is starting to free up slightly from the article below.

Banks 'must free up lending to small businesses' - Business News, Business - The Independent

There's also a great stat in the above article that says 51% of UK GDP is attributable to SME's (companies with less than 50 employees),it kind of puts into perspective just what effect this will have is lending doesn't free up even more.

 

[ribbonprinter]

I have recently had trouble getting acceptable finance for some new machinery. Bank of Scotland asset finance are not accepting proposals for anything less than £50,000. I think this must exclude most businesses as 50k is rather a lot of money.

I contacted my MP who was not fully aware of the position. I gave him the details of the contact number for BoS and he phoned them to confirm the situation.

The banks claim to be lending to small business, but if the bar is set so high that the willing cannot borrow then the situation is a farce. Their claim to be lending is a political spin.

If you are having any difficulty on the finance side please drop your MP an email. Unless MP's are aware of the actual position on the ground pressure cannot be applied on the government to do something about it.

 

[Former Member 1]

Back in November I wrote....

But right now the banks don’t HAVE to do anything.... Which is where the problem lies!

And it remains where the problem lies. The bank's priority is to keep the golden goose of global greed on a global scale alive for as long as possible. To maintain the scenario where a relatively few in positions of privilege can 'bleed off' the wealth that is, in truth, generated by others.

And the sad truth is that our politician's interests and priorities are much in accord with that. Which is why they haven't legislated to CAP interest rates and FORCE lending to consumers and small businesses as a priority.

Instead they're plotting to slap loan-shark interest on social fund loans and finding ways of abdicating their responsibility to, and demonising the inevitable tidal wave of unemployed and ultimately unemployable this passing wave of financial mismanagement will generate....

The banks don't have to do anything because they're greedy. The government won't because they're not only greedy, but dishonest.

 

[Brian McIntosh]

Seems like their greed is getting worse.

BBC NEWS | Business | Treasury mulls new bank bail-out

 

[Power Lunch Club]

It has reiterated the point that banks are not lending to businesses and potential home buyers....the very thing which will get the ecomony going.

This does not take someone with a economic degree to figure out what is needed and just how evil the banks really are.

I have seen for many years how banks treat business, you literally can't break wind without them charging....and if a company is struggling, what is the first thing they do...CHARGE YOU. And they are all the same. We don't have competition between banks, we have a banking cartel in this country.

 

[Scottish Business Owner]

So the first bailout doesn't work and the government decides to throw more money at it!!!

Just how much of these banks will be owned by the taxpayer when this is over?

I'm probably being really naive here but why dont we just have one national bank and give people credit based on their credit score etc? Cut out all the fat cat salaries and corporate greed. Some people might scream it's anti-competitive but hey that card has been played already and was kicked into touch.

If the banks cant be trusted then boot them out! Start again with just one bank and put a set of rules in place that means over a period of time they can go back to the way they are but with far more control and transparency.

I'm actually quite angry about all this but I always think what can one person do, it's not going to change anything. It would take a massive backlash to stop what is happening from continuing.

 

[Adventurelife]

I got a call from my bank yesterday at 1245 hrs informing me that my account was about to go overdrawn. Excellent service was my first thoughts as I never go overdrawn and do not have an overdraft.

I had forgot about a rather large Vat bill coming out at the end of Dec which had stripped the account.

No problem I said here is my debit card to transfer in some money.

"Cannot do that says the voice" What ? I said, it is a debit card with real money backing it up. " no says the voice cannot take it you have to get to a branch and pay in cash by 1400hrs to cover the direct debits coming out"

After getting supervisors 15 minutes had passed etc same result " computer says no" it was like a comedy sketch. Result was going to be charges of stupid levels, even though they could see lots of money that had been paid in on the 5th and had not cleared

Mad drive to Perth to take out cash from one account to pay it into another account. What started out with me thinking well done the RBS for calling me ended up with me wanting to move bank.

My banking arrangements could not be more simple and straight forward as I am a cash positive business. I really feel for those getting shafted by the banks at present. Every day I seem to talk to someone with a bad story.

Peter

 

[davidc]

I have been watching Sky News and it is now being reported that the UK is now printing sterling, in order to flush liquid cash into the system. I wonder if we all club together, and ask for several million, would we get some?

 

[Power Lunch Club]

I have been watching Sky News and it is now being reported that the UK is now printing sterling, in order to flush liquid cash into the system. I wonder if we all club together, and ask for several million, would we get some?

Well what can you say to that,....they must be really desperate now to do that. I mean last week we had interest rate cuts....with RBS saying they wouldn't pass them on (Quoted in the Daily Mail). My flabber is gasted!!

 

[Brian McIntosh]

One other thing I worndered today was, with Lloyds TSB being fined £350 million for illegal trading with Iran, and us taxpayers owning 45% of said bank, are us taxpayers bailing them out?

 

[Power Lunch Club]

Gordon sounds "The Last Post" as HBOS get swallowed up....

BBC NEWS | Business | Lloyds HBOS merger gets go-ahead