Mike Tombs's Blog

This blog provides information about tax, accounting and other issues affecting small owner-managed businesses in the UK. It is intended as a general source of information but you should not assume that everything applies to your specific circumstances. We are always happy to discuss providing tailor-made solutions to suit your individul needs. Visit www.tlaservices.co.uk to sign up for our free monthly Tax Tips and News newsletter.

Tag Archives: banks

…and what not to do if your bank says “No!”

If your bank is still not saying “Yes”, don’t reach for the stocking mask and swag bag because it’s now been statistically proven that bank robbery doesn’t pay as well as you might think.

Three leading economists from the Universities of Sussex and Surrey have shown that the average return on a bank heist in the UK is £12,706.60 per person per raid. To achieve a near-average income, you would have to rob two banks a year. But every additional robbery increases your chance of getting caught by a probability of 0.8.  After four raids the odds are that you will be banged up with consequent impact on your earning potential. On balance, say the economists, robbing a bank is a poor economic decision.

So, if your bank is proving a tough nut to crack, don’t reach for a stocking, reach for the phone and call me. I can’t guarantee to bring home the swag, but I can promise that your odds will improve greatly.

You can read all about the economics of the bank heist here.


How to get your bank to say YES!

How much does it cost to get a bank to say “YES!”

Sir Mervyn King’s £140 billion scheme announced last week to lubricate the banking system and encourage a flow of funds to SMEs and prospective home buyers may not have resulted in an overnight about-turn on the part of the bankers, but there is no doubt now that the balance of probability has shifted in favour of businesses who are prepared to invest.

Along with the Treasury, Sir Mervyn’s plan involves two tranches of support for the banking system:

  • £5 billion a month in cheap six-month loans to banks to guarantee liquidity. The £60 billion total could be much higher as the Bank of England has pledged to provide “whatever liquidity is required” to prevent banks running out of cash.
  • An £80 billion a year “funding for lending” scheme which will enable banks to swap difficult assets for Government bills (the equivalent of cash) but only on condition they pass it on to businesses and households in the form of cheaper loans and mortgages. The scheme will last for four years.

These build on the £20 billion National Loan Guarantee Scheme launched in March and add up to a huge package of support for the banks and, potentially, for businesses that are keen to invest.

All this does not mean that your bank manager is just going to roll over. Banks are still strongly risk-averse and the current turmoil in the Euro-Zone is not making them feel any more generous.  But, if you make your case well, the funds are there. And we can help you make your case.

We have produced a short guide – “How to get your bank to say Yes!“.  It won’t guarantee you a loan, but we can guarantee that your chances of getting one will be much higher.  Just drop me a line – miketombs@tlaservices.co.uk – and I’ll send you a copy.