If you watched the news over the weekend you probably noticed that Pontins have gone into adminstration. Pontin’s chairman Graham Parr said on the news that the business is profitable but had been a victim of the credit crunch and had gone into administration because its bank had withdrawn its support.
Graham Parr said on BBC news the business is profitable that the bank has simply said it is not prepared to support their credit facilities any more. He said that it’s very annoying and the most nonsensical business situation he has ever been involved in.
This is a situation which is happening to thousands of small and medium businesses across the country and areport published today by eBay shows that one in three SMEs are still unable to access new finance from their banks. NatWest has committed to be Britain’s most helpful bank, but the report reveals it has a long way to go, with 50% of businesses saying it hasn’t been any more helpful since the recession began. Although it was bailed out by the taxpayer, Lloyds’ customers are most likely to complain that their bank hasn’t changed its attitude, but Santander leads the pack for satisfaction levels.
A sadly typical case is Alex Ingham who has been selling work wear and clothing through eBay for two years with a turnover of over £650,000.
“ was a fledgling company when the recession began. We had a £50,000 overdraft with NatWest in 2009 and felt we had no other option but to rely on it. When we approached NatWest for financial advice we were told about a factoring route, which gives businesses access to finance on the basis of proof of invoice, but it would have resulted in heavy charges that we simply couldn’t afford when the business was in its crucial early stages. After conducting my own research I found out about the Enterprise Finance Guarantee scheme, which NatWest were not aware of and did not offer to me.
Once I suggested the EFG scheme to NatWest, I secured funds that have allowed us to reduce our business overdraft and improve the businesses access to working capital. However, it should be the bank’s responsibility to be across new Government schemes that support businesses, as they claim to be the experts. The experience has taught me not to rely solely on banks that do not understand the needs of SMEs and start-ups.”Alex Ingham –
The British Bankers Association disagree with eBay’s figures saying that banks are being supportive of small businesses and fully recognise the vital role they are playing in the economic recovery. In a statment they say: “Banks are currently approving around 85 per cent of credit applications from small businesses and several recent independent surveys have confirmed this, so we simply don’t recognize the numbers that eBay is quoting”
Have you had trouble accessing finance or are you forced to rely on expensive borrowing methods such as overdrafts or credit cards? Whilst it’s true some businesses are simply not credit worthy it’s equally true that businesses like M.I. Supplies are simply not being offered the best advice and being made aware of financing options open to them. How helpful is your bank and what finance arrangements would you recommend other eBay sellers investigate for their own businesses?
30 Responses
ebay/paypals got plenty of dosh
why dont they do more to help
If I was a Bank I would be reluctant to lend to businesses whose main income is Ebay. The risks around competition driving down margins, Ebays changes in policies etc would tend to make these proposals very risky.
Pontins lived in the dark ages that is why the bank stopped funding it.
Its not just Pontins. Hardly a day goes by without the news of yet another company going to the wall and usually because the Bank has pulled its finance. Yet many of the Banks are owned/financed by us the people of the UK. So why does our Government not read them the riot act. Start to act responsibly or we the people of the UK will Fore-Close on the Banks. See how the Banksters like it happening to them. In regard to Paypal every time I log on there is a number of accounts worldwide on the screen. Sometimes the numbers quoted are a reduction on the previous time I logged on. Not just a small drop but a substantial drop. Being essentially simple minded I would have thought that Paypals number of Accounts would be continuously rising-or am I even more simple minded than I thought?
I wonder what the default rate is for small bussiness loans.
If I was a bank I wouldn’t be that keen on giving an unsecured loan to small business start up (or a company with ongoing cash flow problems).
we dont rely on the banks the government ebay or paypal to run our business
any help from them is welcome ,
but its not their responsibilty to make our business work
Government is run by the bankers.
Bankers pull the plug on loans when it benefits them. Look for Pontins camps being sold off to friends of bankers with planning consent for residential development.
I bailed out a friend, bank refused cash for the wages despite uncleared cheque from major international co, regular customer. Bank wanted the property, main road edge of city centre industrial site, those either side already bagged.
Banks got themselves a super fibre optic communication network back in the 2000 recession.
JPMorgan Chase controls the largest media portfolio in the US after pulling credit.
https://www.nypost.com/seven/08232009/business/read_all_about_it_186125.htm
etc etc
There’s a pattern to it, works every time. Lend like crazy, burst the bubble, pick up the most valuable assets leaving the rest to be paid off by the taxpayer. Do it a couple of times per generation with one real big one once in a lifetime.
Burst the bubble by simply reducing credit because then there is not enough money in existence to pay the interest. Banks don’t lend money that people have invested in them, they create it. See fractional reserve banking.
ebay are ones to talk, they helped small medium sellers by raising rate, and giving discount to large chains.
If as a business your not making a lot of money and you need loans to survive. Does this not mean something is wronge with your business?
Years ago the Local Bank Manager(Now an almost extinct breed) was the person you saw when you wanted a Business Loan. He not only knew the Bank and its policies but he knew the local area including your business(although if you were a new start-up he would not know that but if you were an existing customer he would have your details at his finger tips). They did not say yes to every application but they were sensible. Then of course we had the period when the Banks seemed to say yes to everything(including the wildest schemes). Now they seem to be saying No to almost everything. Pontins said that they were trading profitably yet the Bank has closed them. In regard to EU I am not their greatest fan(I Voted UKIP) but why do we in the UK always seem to get the mucky end of the stick every time?
In Fact we are only back to where we were in the early 90’s.
The BIG difference this time is we now talk & value in Billions & trillions, whereas then it was 100k’s & millions.
As much as it appears worse this time it is only the volume of money that makes it worse & the fact that is is more worldwide (electronic trading worldwide tranaction etc).
There is also the matter of the vaste increase in the UK’s population to consider since the early 90’s.
I am over 60 & can clearly remember the situation then. Most of our local high steets (SE) were full of boarded up shops. It was like a desert, no buyers, nothing.
I as in the furniture trade then & when you don’t have a customer walk into your store for SIX WHOLE WEEKS, you really don’t stand much chance.
The banks/financials & their greed, was highly resonsible then, as now.
I was forewarned (and I listened) in 2006-7 when the banks, said pile into the Commercial markets, tons of money to be made. Funny that is exactly what they said & dome in 88-89, some big heads in the square mile took a hammering (and some still suffer from it’s affects mentally {no names please}) financially).
The banks went into losses, commercial property (and residental) went into a 30-40% freefall then.
This time property prices were 3 times the high points of 88-90’s & although they have fallen back. it is nothing like what happened then.
The boom years started to make people think, that an automatic property price increase happened every year & borrowed (with the Goverments blessing) accordingly.
THAT JUST STOPPED & that caused what is happening now.
Businesses that have prospered in the boom years of early Labour, should be in a good £££ postion IF THEY KEPT some back for rainy days (which I was always taught to do.
Sadly in today world, everyone spend, spends & spends, as the Labour goverment assured us, boom & bust was over etc’. Not many kept a little back & now everyone wants to borrow.
Banks will not lend Money now & whilst the Goverments (mainly the previous lot) shout about their scrooge-ness, in reality they let the banks become to powerful & hence, they just say, yea, yea, with lip service now.
In the UK we have lost so much manufacturing to the likes of the far east etc, we really only have financual services to support the whole country.
Just yesterday on the news in the SE, it was said that the minimum wage now in the Se should be (wait for it) £7.85p an hour. When you consider wages elsewhere in the developing world, that is for a week in some places.
From my point, we saw this all coming & got out of a few commercial bits, when the prices were high, then got back in after they had collapsed.
Didn’t make toms of ££’s, but we don’t need to go cap in hand to the banks now….. thankfully.
I can remember an interview with the late Sir James Goldsmith(lovely man I had a lot of respect for him-I campaigned for the Referendum Party). He was describing how he made his millions and he said that a lot of it was the ability to know exactly the moment to sell and buy. He described selling all his shareholdings just before a collapse and then a short time later being in the position to be able to buy them all back and still have a lot of dosh left over. Unfortunately while he could do that the bulk of the banksters poured money into dodgy investments which were valueless(the so called toxic investments) and then cried out for the Government to bail them out so they could continue to pay themselves vast unearned and totally unjustified “Bonuses”.
I spend a lot of time in Italy
with no hassle no real restrictions
I quite like the EU