Business loans, 100% government backed,

jendan

Member
Mixed Farmer
Location
Northumberland
But if I take out a loan secured against land, it's on the land registry that the bank has 1st charge.
What's stopping me from transferring assets out of the business the 50k was lent to? Asking for a friend.
"asking for a friend" :LOL: I think this thread and the posts on it are too transparent. You can bet your life every agric relationship manager in the country will be reading these.
 

jendan

Member
Mixed Farmer
Location
Northumberland
Good question. I have applied to Natwest, and in the small print it says that if you default on the loan the bank may demand immediate repayment, which you would expect. However, it also states under "what's an event of default", that "Each of the following is an Event of Default", one being "there is a significant drop in value of the customer's business". What is a significant drop, and who decides? I would think many applying, perhaps less so in agriculture, could well have a significant drop in business value due to Covid19, hence the requirement for the loan. Could the bank pull the loan in the future under this clause and pressurise the business into a replacement one at a higher interest rate? Have all the banks got this clause in?
All the banks recovery teams have more money than any individual to fight cases.So they will always win in the end.
 

digger64

Member
[Qdon't t="som farmer, post: 6925860, member: 86168"]
took a bit of thinking, to get my head round it, it is a huge experiment, nothing to compare it with, but, if it works, like I think it will, it is incredibly, clever, and brave, as well as a huge risk. Someone at the treasury, must have burnt a lot of midnight oil. Also, it shows the lengths guv will go, to protect the economy, and us. Compared to Europe, which we hear nothing similar to this, though there might, it extremely radicle.
The proof, will be how we come out of this, compared to other countries, EU has plenty of basket economies, that would have looked, to us, or Germany, to provide the cash, to continue, we wont, and Germany will be in recession, as clive posted earlier, probably the end of the EU, or at least, the start of the end.
But, we should all appreciate the effort, and risk, the BOE and the treasury are taking, and perhaps, what Corbyns lot, would have done. If this is a forerunner, of post EU, policy, it gives me confidence, that cummings odd and weird staff are planning, a good future for us.
[/QUOTE]
I dont think it's a new idea didn't an economist called keynes I think advocate something similar in the 1930 s ?
 
But if I take out a loan secured against land, it's on the land registry that the bank has 1st charge.
What's stopping me from transferring assets out of the business the 50k was lent to? Asking for a friend.
You can be sure that the name that applied for the loan would have his private assets seized if no business assets left.
 

Sid

Member
Livestock Farmer
Location
South Molton
"asking for a friend" :LOL: I think this thread and the posts on it are too transparent. You can bet your life every agric relationship manager in the country will be reading these.
The asking for a friend was in jest. I haven't applied for a loan.
You can be sure that the name that applied for the loan would have his private assets seized if no business assets left.
I know plenty of businesses that have gone pop and guess what, they have no assets to their name.
 

digger64

Member
Don't TE="Sid, post: 6926195, member: 574"]
The asking for a friend was in jest. I haven't applied for a loan.

I know plenty of businesses that have gone pop and guess what, they have no assets to their name.
[/QUOTE]
Dont think they will be to worried as the money will still be in the system somewhere , and consequential failiures will still be lower than they would have been without the loan . If the money was moved abroad there might be issues .
I think the reality for the gov is spend now on keeping it all going and hope it recovers or spend later on social support and unemployment benefits as a consequence of economic failure .
 
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pappuller

Member
Livestock Farmer
Location
M6 Hard shoulder
as some will have noticed im wary of taking up this loan even though I could probably justify some effect due to the virus but if a similar % of farmers in the big wide world are going to be taking up the loan as are posting on here and I dont I can see us being disadvantaged as lets face it the main competitor a farmer has is another farmer and those with more cash available than you is not helpful !! especially if they think they are operating with all but free money for the next couple of years till the chickens come home to roost
Unfortunately a farmer's biggest competitor will always be his neighbour/fellow farmer.
 

pappuller

Member
Livestock Farmer
Location
M6 Hard shoulder
Exactly, it's a business tool, the only one that will fall foul of it are the ones that don't know how to use it.
I can see a claim scheme just like PPI on this in years to come suggesting that they were told they had to pay it back or the likes of!
Clue is in the name "LOAN"
We have a couple of sheds going up in the near future on the mid tier, we have applied to assist with paying for these instead of increasing the o/d and subject to the grant being paid within 12mnths we will repay the loan within that time. It's purely a decision based on less income based on milk price reduction during the present situation.
 

The Son

Member
Location
Herefordshire
We have a couple of sheds going up in the near future on the mid tier, we have applied to assist with paying for these instead of increasing the o/d and subject to the grant being paid within 12mnths we will repay the loan within that time. It's purely a decision based on less income based on milk price reduction during the present situation.
This is exactly why i am taking it, i have a large amount of planned expenditure with mid tier this year, as the virus has rolled on i have been increasingly concerned aboout getting my money from the rpa in a timely manner, by taking the loan I derisk this somewhat and still put a large amount of cash out to local businesses.
 
I see it that the government / Bank of England is doing what it can to help business
they are ensuring the banks help
after the 2007/8 credit crunch the banks bosses got such a kicking from all sides and capital reserve requirements that they would not take risks again
this allows the banks to facilitate the continuation of business
they do not have time to do due diligence on every business as this would leave good businesses short of cash starving the economy
low interest rates only work if the money is lent to business
rates reduction help and wages made up
 

SFI - What % were you taking out of production?

  • 0 %

    Votes: 80 42.1%
  • Up to 25%

    Votes: 67 35.3%
  • 25-50%

    Votes: 30 15.8%
  • 50-75%

    Votes: 3 1.6%
  • 75-100%

    Votes: 3 1.6%
  • 100% I’ve had enough of farming!

    Votes: 7 3.7%

Red Tractor drops launch of green farming scheme amid anger from farmers

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As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
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