Another Celebrity Chef in the Stew

Alan_M_2

Doozergirl wrote: »

The orders from on high are very strong to find lending but unsecured isn't very popular. The rates are higher than before, non negotiable and the LTV available to secure against property is down. For my product I saw pretty big numbers last week which tallies with more lending than of late but the managers I've spoken to say they are struggling to find it - the sort the bank wants I guess. They are overexposed on property, no surprise.

All my funding is secured, and as a result of this thread I watched working lunch on Iplayer to see exactly what AWT said:-

Firstly he was a director of a Limited company AWT Ltd.

This Limited company owned and operated 6 restaurants all bought with profits from previous resuatrants as they'd grown. 5 of the 6 were running at a profit.

LloydsTSB had charges on these properties amounting to in excess of £400,000.

AWT Ltd outstanding borrowing was £250,000, they wanted to extend a further £200,000 to allow the 6 units to continue trading.

Why do they want or need more security? Why do they require any directors gaurantees, therefore negating the whole reason for a Ltd company?

The situation I'm in is the same, LloydsTSB have secured all the borrowing my Ltd company has on property, they have in the region 140% of our facilities covered....then two weeks ago they told us they required more security, a debenture on the company and personal garuantees for us to continue our existing position, they wanted 200% security on our lending...If we were not prepared to offer this then our facilities are withdrawn....

Of course I'm not prepared to do this, no one in their right mind would agree to this.

What they are saying is, We want all our money back and we want it now, we don't care what it does to your business but we're not allowed to say that becasue the goverment have told us to lend more.....so we'll ask for ridiculous amounts of securitisation that no one in their right mind would accept....oh and you have a month.

Looking through most of the venemous replies on this thread I'd hazard a guess that many of you don't run businesses and don't have the first idea of why you'd set up a Ltd company to start with.

AWT Ltd is another example of a profitable viable business being destroyed by a bank in a state of panic.

tirano

Alan_M wrote: »

The tops I sell average £200 - £300 per length, I'm a wholesaler not a retailer.

Of your £6000 fit, around £4500 would have been retail mark up and profit,

Looks as though you should get into Retail !

Alan_M_2

Kev09 wrote: »

That is a bad analogy, business should not be borrowing to finance stock, If they are then they are in trouble, business do need to borrow from time to time, but it should be to finance big projects etc not as working capital!

An entire level of finance exists for this very purpose, it's called stock finanace funnily enough.

Do you really think any retailler you walk into pays for all the stock on it's shelves up front? Of course it doesn't, it's financed, even if it's on credit with the supplier, credit costs would be built into the wholesael price and so will the cost of credit insurance.

If this form of stock finanace didn't exist, practically every retail park would close overnight.

tirano

Lloyds come out looking good in this report

http://www.telegraph.co.uk/finance/yourbusiness/4571396/Business-loans-one-mans-attempt-to-persuade-banks-to-lend.html

Alan_M_2

tirano wrote: »

Looks as though you should get into Retail !

Nah, I deal in volume, at £6000 they may get a sale a week...if they're lucky. On a good week I'll shift over 60 countertops, and I won't have to deal with any installations, transport, fabrication, staff or members of the general populous.

bo_drinker

A W T had a dig at Ramsay on the news (no names).

Securitisation ?? Is that a word??

Alan_M_2

tirano wrote: »

Lloyds come out looking good in this report

http://www.telegraph.co.uk/finance/yourbusiness/4571396/Business-loans-one-mans-attempt-to-persuade-banks-to-lend.html

Yup, walk in the door, they all make the right noises, especially if you qualify for the EFG scheme. But then you go and talk to those that make it happen and the story is a little different.

Thrugelmir

Alan_M wrote: »

All my funding is secured, and as a result of this thread I watched working lunch on Iplayer to see exactly what AWT said:-

Firstly he was a director of a Limited company AWT Ltd.

This Limited company owned and operated 6 restaurants all bought with profits from previous resuatrants as they'd grown. 5 of the 6 were running at a profit.

LloydsTSB had charges on these properties amounting to in excess of £400,000.

AWT Ltd outstanding borrowing was £250,000, they wanted to extend a further £200,000 to allow the 6 units to continue trading.

Why do they want or need more security? Why do they require any directors gaurantees, therefore negating the whole reason for a Ltd company?

The situation I'm in is the same, LloydsTSB have secured all the borrowing my Ltd company has on property, they have in the region 140% of our facilities covered....then two weeks ago they told us they required more security, a debenture on the company and personal garuantees for us to continue our existing position, they wanted 200% security on our lending...If we were not prepared to offer this then our facilities are withdrawn....

Of course I'm not prepared to do this, no one in their right mind would agree to this.

What they are saying is, We want all our money back and we want it now, we don't care what it does to your business but we're not allowed to say that becasue the goverment have told us to lend more.....so we'll ask for ridiculous amounts of securitisation that no one in their right mind would accept....oh and you have a month.

Looking through most of the venemous replies on this thread I'd hazard a guess that many of you don't run businesses and don't have the first idea of why you'd set up a Ltd company to start with.

AWT Ltd is another example of a profitable viable business being destroyed by a bank in a state of panic.

Why should the banks take all the risk?

As you say "Why do they want or need more security? Why do they require any directors gaurantees, therefore negating the whole reason for a Ltd company?"

If its a success the rewards go to the shareholders of the Company, if it fails we the taxpayers foot the bill.

Its all become too easy to borrow money and speculate to accumalate.

Doozergirl

Thrugelmir wrote: »

Why should the banks take all the risk?

As you say "Why do they want or need more security? Why do they require any directors gaurantees, therefore negating the whole reason for a Ltd company?"

If its a success the rewards go to the shareholders of the Company, if it fails we the taxpayers foot the bill.

Its all become too easy to borrow money and speculate to accumalate.

Lloyds TSB were the boring bank, with a low risk model.

Thrugelmir

Doozergirl wrote: »

Lloyds TSB were the boring bank, with a low risk model.

Agreed.

However they were asked to take over HBOS.