Irish Banks are Aggressively Anti-Business

bactrian

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I've been talking to a number of people over the past while (possibly 2 years) and they have all complained about the difficulties they have borrowing money from the banks when they want to expand/grow their businesses . The banks want a "No-Risk" lending, they demand very onerous conditions on the borrowers.

Any legal/financial/accounting person I have talked to says that they have always ,always advised their clients against these terms. They have given this advice in the full knowledge that it will be ignored. Their attitude has been : The banks have the money, my clients need it , I have to tell them the terms are awful, they know it , they don't have a choice, they are going to accept the terms. Added to this the banks also want Guarantors to go security for loans

It seems that Irish Business people have swallowed hard and endured the harsh and unreasonable conditions imposed by the banks; but the banks don't actually want to lend so they have now devised the policy of imposing "If things go wrong ,we are going to suck the blood from your veins" conditions demands from Guarantors of loans.
 


Voluntary

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Are you surprised? This country proved business can go up and down like a fly, the risks investing in Ireland are high so the borrowing costs are high and guarantees are being seek.
 

gleeful

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Its always been like this for non-property deals. Businesses are lucky if they get harsh terms as many others are just told no.

Even getting credit cards for sales guys is a total pain. In our place we had a deposit account with 250k cash. Bank of Ireland account. We asked Bank of Ireland for a credit card limit of 10k (spread across several cards) and they demanded a personal guarentee.
 

ON THE ONE ROAD

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I've been talking to a number of people over the past while (possibly 2 years) and they have all complained about the difficulties they have borrowing money from the banks when they want to expand/grow their businesses . The banks want a "No-Risk" lending, they demand very onerous conditions on the borrowers.

Any legal/financial/accounting person I have talked to says that they have always ,always advised their clients against these terms. They have given this advice in the full knowledge that it will be ignored. Their attitude has been : The banks have the money, my clients need it , I have to tell them the terms are awful, they know it , they don't have a choice, they are going to accept the terms. Added to this the banks also want Guarantors to go security for loans

It seems that Irish Business people have swallowed hard and endured the harsh and unreasonable conditions imposed by the banks; but the banks don't actually want to lend so they have now devised the policy of imposing "If things go wrong ,we are going to suck the blood from your veins" conditions demands from Guarantors of loans.

what areas of business are your associates in?

banks have a poor record investing in area's outside construction and agriculture. The state historically through protectionism and FDI despite all the criticisms they get are the ones who make some efforts to assist the building of new pillars to the economy.

How much of AIB is owned by the state. Maybe push for it to be held on to until some signs of diversification are shown. A motive for the state as well in that to avoid having to pick up the bill for the banks again they cannot be over reliant on one sector of the economy.
 

jcdf

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This does not surprise me. An article from Time magazine summed up the situation well for me.

Over the past few decades, finance has turned away from this traditional role. Academic research shows that only a fraction of all the money washing around the financial markets these days actually makes it to Main Street businesses. “The intermediation of household savings for productive investment in the business sector—the textbook description of the financial sector—constitutes only a minor share of the business of banking today,” according to academics Oscar Jorda, Alan Taylor and Moritz Schularick, who’ve studied the issue in detail. By their estimates and others, around 15% of capital coming from financial institutions today is used to fund business investments, whereas it would have been the majority of what banks did earlier in the 20th century.

“The trend varies slightly country by country, but the broad direction is clear,” says Adair Turner, a former British banking regulator and now chairman of the Institute for New Economic Thinking, a think tank backed by George Soros, among others. “Across all advanced economies, and the United States and the U.K. in particular, the role of the capital markets and the banking sector in funding new investment is decreasing.” Most of the money in the system is being used for lending against existing assets such as housing, stocks and bonds.

To get a sense of the size of this shift, consider that the financial sector now represents around 7% of the U.S. economy, up from about 4% in 1980. Despite currently taking around 25% of all corporate profits, it creates a mere 4% of all jobs. Trouble is, research by numerous academics as well as institutions like the Bank for International Settlements and the International Monetary Fund shows that when finance gets that big, it starts to suck the economic air out of the room. In fact, finance starts having this adverse effect when it’s only half the size that it currently is in the U.S. Thanks to these changes, our economy is gradually becoming “a zero-sum game between financial wealth holders and the rest of America,” says former Goldman Sachs banker Wallace Turbeville, who runs a multiyear project on the rise of finance at the New York City—based nonprofit Demos.
American Capitalism
 
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amsterdemmetje

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While not in business me and the wife do have a meeting with the bank tomorrow concerning a mortgage for a house. Have deposit and everything else they need so hopefully it will go well.
 

Extra

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While not in business me and the wife do have a meeting with the bank tomorrow concerning a mortgage for a house. Have deposit and everything else they need so hopefully it will go well.
They don't like stalkers you know, banks that is. Me on the other hand...:cool:
 

benroe

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While not in business me and the wife do have a meeting with the bank tomorrow concerning a mortgage for a house. Have deposit and everything else they need so hopefully it will go well.
Good luck.:)
 

SideysGhost

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Its always been like this for non-property deals. Businesses are lucky if they get harsh terms as many others are just told no.

Even getting credit cards for sales guys is a total pain. In our place we had a deposit account with 250k cash. Bank of Ireland account. We asked Bank of Ireland for a credit card limit of 10k (spread across several cards) and they demanded a personal guarentee.
Yeah it's always been this way in Ireland, the banks simply have no interest in anything outside of property and agriculture, and most of them are actively hostile to small businesses. The crash of 2008 and most of the banks being nationalised was a golden opportunity to clean shop and forcibly remake the culture of the Irish banks, but of course the drooling inbreeds of FF/FG didn't have the wit to comprehend there even was a problem, and instead set about circling the wagons and spending the last 8 years trying to re-inflate the property bubble.

It'll never change.
 

Therightroad

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Seem to be no problem getting credit cards anyways, Everytime I go into the bank the staff are trying to sell them
 

storybud1

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While not in business me and the wife do have a meeting with the bank tomorrow concerning a mortgage for a house. Have deposit and everything else they need so hopefully it will go well.
Have you checked out the future value of your house in "normal conditions"

1) Is it a new house in a new estate with lots of potential for more housing in the future ? (don't buy it)
2) What is the potential for expanding social housing in the area ? (don't buy it)
3) Have you looked at a smaller house in a more expensive area with ZERO room left to build new housing ? (buy it)

There is a social and affordable housing boom coming, the banks know this and are parasites using borrowed money at 0.25% to sell you the same money at 4%, don't hope, plan for your future and look upon them as nothing but middlemen that are laughing at you in the end.

they don't call it , location, location location for nothing and a large house in a bad area may be more comfortable for a while but it will not give you a better return in the end.
 

Mad as Fish

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And yet the wingnuts will tell you to p1ss off and start your own business if you are unemployed, just how that is to happen they are too busy hurrumphing to explain, possibly because they have this belief that you don't need capital to get going or that the banks are there ready to throw money at you, backing brave and all that crap.
 

Analyzer

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The Irish banks are
anti-taxpayer
anti-transparency
anti-compliance with the same laws as everybody else
anti-capitalist when stop making mega profits
 

ManUnited

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I've been talking to a number of people over the past while (possibly 2 years) and they have all complained about the difficulties they have borrowing money from the banks when they want to expand/grow their businesses . The banks want a "No-Risk" lending, they demand very onerous conditions on the borrowers.

Any legal/financial/accounting person I have talked to says that they have always ,always advised their clients against these terms. They have given this advice in the full knowledge that it will be ignored. Their attitude has been : The banks have the money, my clients need it , I have to tell them the terms are awful, they know it , they don't have a choice, they are going to accept the terms. Added to this the banks also want Guarantors to go security for loans

It seems that Irish Business people have swallowed hard and endured the harsh and unreasonable conditions imposed by the banks; but the banks don't actually want to lend so they have now devised the policy of imposing "If things go wrong ,we are going to suck the blood from your veins" conditions demands from Guarantors of loans.
Like what?
I think it's probably a good thing that banks have stopped throwing money around like confetti.
 

Ultan Murphy

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During the Irish financial crash of 2008 I read that AIB had just 8% of all their loans going to small business and 75% in property.

The UK Banks by contrast had 30% in small business.

That pretty much sums it up.
 

gleeful

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During the Irish financial crash of 2008 I read that AIB had just 8% of all their loans going to small business and 75% in property.

The UK Banks by contrast had 30% in small business.

That pretty much sums it up.
Its pointless even asking for an SME loan from an Irish bank. Id bet that 8% was actually backed with some personal guarentee or a lein on property.
 

Mad as Fish

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Like what?
I think it's probably a good thing that banks have stopped throwing money around like confetti.
The problem is that that they are not throwing it around at all. Commerce relies upon capital to work, the role of the banks was to provide that capital, they no longer perform that function, or only to a limited extent.
 

Jack O Neill

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Like what?
I think it's probably a good thing that banks have stopped throwing money around like confetti.
Really , obviously not in business or likely to ever be in business , who would have known .The banks especially BOI are still paying their executives enormous unjustified salaries while operating a no service, high charges , no risk banking model .
 

Civic_critic2

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Why don't people just make money for themselves and use that as investment in their business rather than rely on banks? Many more people are aware now of the true nature of this state, its origin and aims and the class running it than did before - knowing that, how can people be surprised that we've ended up with this banking and business environment.

Withdraw. Withdraw from them and their sh1tty rigged game, make your own money, defer expansion if necessary, there are always opportunities.
 


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