April 28, 2010

Save our businesses - open the bank

Posted in Your Ideas ·

I propose to set up a website in order to provide a platform and galvanize support for an approach to Government to force them to get the banks to provide cash flow relief and additional funding for SME\’s at affordable rates. I would like SME\’s to register on the site and put the name of their business, number of years in business, number of employees and some other details. I will then put a proposal to Government for the following:
1. The banks are to allow all companies to put their loans on an interest only payment structure for three years. This will improve cash flow.
2. All lease periods can be pushed out. So if you have 3 years left on a lease you can put this out to 5, if you have 5 years left you can push this out to 7. Again this has an immediate positive impact on cash flow.
3. The rate of interest on all established bank overdrafts is to be restricted to 2% above ECB. My bank are currently charging me 8.9% which is almost 9 times the ECB rate. This is loan sharking!
4. The banks should be obliged to lend a minimum of €25,000 per employee to business that require it. This will be on an interest only basis for five years at 2% above ECB. The banks are to accept personal guarantees from company directors or business owners as opposed to asset backed collateral (which is in short supply now). This will give business the much need cash injection to cover losses while they restructure their business to adjust to the current environment and the economy gets back on its feet. I came up with the figure of €25,000 as this is the approximate cost of keeping someone on the social welfare for a year. It is a tangible and quantifiable amount.

I am not asking for any handouts merely breathing room and assistance to keep our business going and keep our employees in jobs. The Government has given billions to the banks and it is time the SME;s got help. If we don\’t the dole cues will get longer and this recession will put the whole country out of business.