Ron.M -> Da Banks.. (Jun. 29 2010 20:35:09)
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Just heard an interesting programme on the Radio about the problems small businesses are having getting loans and overdraughts from Banks. (This is despite the fact that the Banks are only functioning on Public money, otherwise they would have gone bust long ago.) So this guy with a small business gets a good offer to expand but needs £2,000,000 The Bank says they would have to do an investigation by auditors, which would cost £30,000 payable by him. So he says OK and the report is made. The Bank then says that there are a few things that they would have to look at closer and would need a further audit costing £40,000 (to him) So he reluctantly agrees and the report is made. So the Bank call him in and say OK...we'll lend you the £2,000,000... BUT... You will have to deposit £2,000,000 with the Bank first. So the guy says he doesn't have the £2,000,000...that's why he came to the Bank in the first place.....but, out of curiosity... how would this work anyway? So the Bank explains that if he had to deposit £2,000,000 with them as security, they would be prepared to give him 0.1% interest on it but would authorise a £2,000,000 loan to him at 3.5% When he pointed out that this was crazy economics, the Bank responded by saying that these were difficult times and the Banks had to remain vigilant and proceed with caution and prudence. This sort of stuff used to be Monty Python..[:D] cheers, Ron
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