Those of you from the UK will be aware (or should be) that the UK government are offering 100% government-backed bounce back loans of up to £50,000 for limited companies up to a maximum of 25% of their revenue. The loans are being offered through high street banks and they are falling over each other eagerly trying to lend money to people. Why wouldn't they? It's 100% government-backed, after all.
The loans are 2.5% interest per annum and the government cover your first year's interest for you as an upfront payment direct to the bank that you lend from. On top of this, you don't have to repay any capital for the first 12 months. I've heard many stories of people applying for £50k at 5pm and waking up to find it in their bank at 8am the next morning. No checks on the revenue figures you provide and no credit checks on either you as a director, or the on company itself.
So year 1 - no payments.
Years 2-6 capital repayment plus 2.5% interest.
I thought this might make for a good discussion.
What would you do with £25-50k to get a return on the money greater than the interest being charged? Surely it's a no brainer to take the money and put it to work?
Discuss!
The loans are 2.5% interest per annum and the government cover your first year's interest for you as an upfront payment direct to the bank that you lend from. On top of this, you don't have to repay any capital for the first 12 months. I've heard many stories of people applying for £50k at 5pm and waking up to find it in their bank at 8am the next morning. No checks on the revenue figures you provide and no credit checks on either you as a director, or the on company itself.
So year 1 - no payments.
Years 2-6 capital repayment plus 2.5% interest.
I thought this might make for a good discussion.
What would you do with £25-50k to get a return on the money greater than the interest being charged? Surely it's a no brainer to take the money and put it to work?
Discuss!
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