These fifty grand loans
Discussion
fesuvious said:
It's smelling a lot like subsidies to lenders.
Yes, I know it will be a lifeline for many, but once again banks&lenders are being gifted revenue/profits
If (IF) these loans (and CBILS too?) are at this sort of interest rate - why?
Base rate 0.1%
This is giving business a short term bailout, but banking a long-term bailout.
Yes. Another one. I have argued in several arenas that the BoE / HMRC / HM Treasury could have implemented a direct lending scheme for businesses in the time it has "wasted" trying to get commercial banks to deliver the government's intented outcome of the CBILS type schemes.Yes, I know it will be a lifeline for many, but once again banks&lenders are being gifted revenue/profits
If (IF) these loans (and CBILS too?) are at this sort of interest rate - why?
Base rate 0.1%
This is giving business a short term bailout, but banking a long-term bailout.
The latest batch of near free money available to banks went live this week too TFSME: 4 year loans from the BoE to commercial banks at base rate linked to how much those banks lend to SMEs
https://www.bankofengland.co.uk/markets/market-not...
https://www.gov.uk/guidance/apply-for-a-coronaviru...
I'm tempted to apply to see what interest rate is, then if it's lower than some existing borrowing, pay the existing off, and get the interest covered for 12 months by the government OR stick the £50k in the bank for 12 months and make a decision to pay back or not in 12 months time.
I'm tempted to apply to see what interest rate is, then if it's lower than some existing borrowing, pay the existing off, and get the interest covered for 12 months by the government OR stick the £50k in the bank for 12 months and make a decision to pay back or not in 12 months time.
Mr Overheads said:
https://www.gov.uk/guidance/apply-for-a-coronaviru...
I'm tempted to apply to see what interest rate is, then if it's lower than some existing borrowing, pay the existing off, and get the interest covered for 12 months by the government OR stick the £50k in the bank for 12 months and make a decision to pay back or not in 12 months time.
Exactly what I plan to do.I'm tempted to apply to see what interest rate is, then if it's lower than some existing borrowing, pay the existing off, and get the interest covered for 12 months by the government OR stick the £50k in the bank for 12 months and make a decision to pay back or not in 12 months time.
t storm Yeah.
But you can not use them to pay off existing debt. How they would know is beyond me, but in your financial plan you can put down you are paying off say a £70k loan at 7% and using the rest.
Which is a little annoying.
Surely the whole thing should be about allowing businesses to get their overheads down to as low as possible.
But you can not use them to pay off existing debt. How they would know is beyond me, but in your financial plan you can put down you are paying off say a £70k loan at 7% and using the rest.
Which is a little annoying.
Surely the whole thing should be about allowing businesses to get their overheads down to as low as possible.
fesuvious said:
Is that what the CBILS loans are going out at? 2%?
No. HSBC are 3.49% rising to 3.99% over base fixed. There's a chap on the Business and Continuity thread just secured £25k CBILS from Natwest at 6.49%. Which sounds like his trousers are round his ankles to me. HSBC think the BB loans will be a higher rate because of self cert and fixed at 60 months, but not penalty for early repayments.
Will be interesting to see the 'deal' on Monday when it launches.
I will be tempted to apply but if successful the money will be placed in the savings account and used only if absolutely necessary. Many business's will have racked up enough debt due to the virus etc and having £50k loan repayments to find along with everything else may be a step beyond!
Tom
I will be tempted to apply but if successful the money will be placed in the savings account and used only if absolutely necessary. Many business's will have racked up enough debt due to the virus etc and having £50k loan repayments to find along with everything else may be a step beyond!
Tom
Tyre Smoke said:
No. HSBC are 3.49% rising to 3.99% over base fixed. There's a chap on the Business and Continuity thread just secured £25k CBILS from Natwest at 6.49%. Which sounds like his trousers are round his ankles to me.
HSBC think the BB loans will be a higher rate because of self cert and fixed at 60 months, but not penalty for early repayments.
I've pulled my trousers up now with some maths - 3.55% HSBC think the BB loans will be a higher rate because of self cert and fixed at 60 months, but not penalty for early repayments.
although I'm so bored at the moment I'd be tempted to pay another 3% for that sort of entertainment...
quinny100 said:
Other than moral compass, is there anything to stop a director of a PSC obtaining a £50k loan, paying themselves a salary of £6250 a month PAYE for the rest of the year, and winding up the PSC early next year - having registered another PSC for their future work?
Interesting...very interesting...fesuvious said:
I'm not a small amount disgusted.
I stand by earlier statement. Once again, banks are being given goods revenue, and a good margin dressed up as help for the masses.
This feels wrong, when rates on the loans are that high. Against a 0.1% base rate? c'mon!
The liquidity the banks use for the loans doesn't cost them 0.1%.I stand by earlier statement. Once again, banks are being given goods revenue, and a good margin dressed up as help for the masses.
This feels wrong, when rates on the loans are that high. Against a 0.1% base rate? c'mon!
Even LIBOR for 12 months is 0.87%.
Powerfully Built PSC Director - Outside IR35 said:
Interesting...very interesting...
AIUI to obtain a £50k loan would need the PSC to have been doing £200k turnover and not be an undertaking in difficulty on 31 Dec 2019There are some circumstances where popping it the after tax income on £50k PAYE might be attractive, but I think they are fairly few and far between aren't they?
Edited by anonymous-user on Wednesday 29th April 14:27
loafer123 said:
The liquidity the banks use for the loans doesn't cost them 0.1%.
Even LIBOR for 12 months is 0.87%.
It might actually cost them less than 0.1% in the wash up. They will get most of the money through the TFSME, which is 0.1% over 4 years https://www.bankofengland.co.uk/markets/market-not... then, depending on how they can treat the loan from a risk weghting perspective, they might be able to lend more at higher rates as a result of having these loans on their books.Even LIBOR for 12 months is 0.87%.
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