Holier than Thou

I was the MD of a manufacturing company in Sheffield. Unfortunately the company failed at the beginning of this year. We employed 14 people and were expecting to increase this to close to 50 by the end of the year. When the company closed we had close to £200,000 of orders on hand, but could not obtain components to complete them. Several months before the failure I asked our bank, RBS, for a government supported loan (EFG Loan) and after being fobbed off for all kinds of reasons, I contacted the offices of our minister for business (Lord Mandelson). They have a special department that deals with problems related to RBS. RBS is something like 80% owned by the UK Government due to their failure to conduct business in a prudent manner. After a lot of effort on my part and cutting a long story short, our bank manager turned up at my office to discuss an application for a loan. He then became very busy with far more important clients and before he finally got off his ass to make the application we were gone. A couple of months following the closing of the company I had to file for personal bankruptcy. I had invested all my resources in the company. Once you are bankrupt in the UK the banks reduce the status of your personal bank account. They sent me a letter saying they would very graciously allow me to keep my account open, but I would not be allowed to use telephone banking or access my account through the internet. I called them to ask about this. The response I got was, "well we can’t allow internet access to someone who has experienced a business failure!" " Oh!" I said, “I quite understand, … but how is it that you have internet access?”

I guess I sound a little bitter..and I am actually. I have started and run businesses in Canada and I was well supported by the banks there, well RBC at any rate. Since being in the UK my impression is that businesses here have to strive for success in spite of the banks. Before starting my last company I worked for a couple of well established Yorkshire companies and the approach to the banks was “please may we have an overdraft? “ Like the bank is doing you a big favour by allowing you to do business with them. In the UK the banks don’t give you a line of credit (this is borrowing, based on accounts receivable, or Invoices). Here they offer you Invoice Factoring, or Invoice Discounting. This is actually exactly the same as a line of credit, but the banks have packaged it so that they can rape you with charges and completely remove risk to them. A line of credit enjoyed by North American Companies usually only costs interest at typically prime plus anything from 0.75% to 2% depending on risk. And we wonder why Britain is one of the most expensive countries to live in…..I think we owe it all to our friends the (W) Bankers. By the way, since my bankruptcy , I have learned to manage quite well without using banks. Give it a try you may be happily surprised.

Bytchy.