heppers Posted October 10, 2020 Share Posted October 10, 2020 I advise businesses on their funding arrangements. Rarely is it a good idea to borrow money to finance losses. It merely buys you time. Unless you are going to do something different. Such as cut costs, change direction, drive efficiencies, etc.. I accept football is different but what is likely to make SWFC profitable or even break even? Other than promotion, not a lot. 4 Link to comment Share on other sites More sharing options...
heppers Posted October 10, 2020 Share Posted October 10, 2020 4 minutes ago, Grandad said: Quite often they lend on behalf of private individuals looking to see a better return on their money than they can get in other investments. Agreed but what is attractive is the high returns. I’d guess this is circa 10% interest or more. Potentially much more. It feels a bit desperate. Link to comment Share on other sites More sharing options...
vulva Posted October 10, 2020 Share Posted October 10, 2020 11 minutes ago, heppers said: Agreed but what is attractive is the high returns. I’d guess this is circa 10% interest or more. Potentially much more. It feels a bit desperate. Agree. 10% might be pushing it but I suspect various fees as involved as well. Desperate possibly. Deckchairs and titanic more aligned to the situation in reality. In isolation, DC leveraging against the ground doesn’t worry me. It’s his asset, his money. If he sees this as part of the longer term plan, and requires liquidity to fund other areas, fair enough. What does worry me is the longer term impact of him falling out of love with the whole project, and this debt and the clubs ability to repay it in say League 1. 3 Link to comment Share on other sites More sharing options...
Morepork Posted October 10, 2020 Share Posted October 10, 2020 (edited) 13 minutes ago, vulva said: What does worry me is the longer term impact of him falling out of love with the whole project, and this debt and the clubs ability to repay it in say League 1. Trying to think of an analogy for buying something, wasting £180m, spending loads of time away from family and ending up with a lot of people either distrusting, disliking you or both!! But I can’t........ He must rue the day, buyers remorse on a colossal scale? Edited October 10, 2020 by Morepork 2 1 Link to comment Share on other sites More sharing options...
Guest mkowl Posted October 10, 2020 Share Posted October 10, 2020 30 minutes ago, heppers said: I advise businesses on their funding arrangements. Rarely is it a good idea to borrow money to finance losses. It merely buys you time. Unless you are going to do something different. Such as cut costs, change direction, drive efficiencies, etc.. I accept football is different but what is likely to make SWFC profitable or even break even? Other than promotion, not a lot. Can't argue with that. In any other business that is a red flag. Link to comment Share on other sites More sharing options...
Guest mkowl Posted October 10, 2020 Share Posted October 10, 2020 30 minutes ago, heppers said: Agreed but what is attractive is the high returns. I’d guess this is circa 10% interest or more. Potentially much more. It feels a bit desperate. At least 10% One of my clients is paying that to an investor in their business and said investor gets 40% of net profit on top Link to comment Share on other sites More sharing options...
Guest mkowl Posted October 10, 2020 Share Posted October 10, 2020 18 minutes ago, vulva said: Agree. 10% might be pushing it but I suspect various fees as involved as well. Desperate possibly. Deckchairs and titanic more aligned to the situation in reality. In isolation, DC leveraging against the ground doesn’t worry me. It’s his asset, his money. If he sees this as part of the longer term plan, and requires liquidity to fund other areas, fair enough. What does worry me is the longer term impact of him falling out of love with the whole project, and this debt and the clubs ability to repay it in say League 1. You only have to look back to the period 2000 - 2010 to remind ourselves what happened when we leveraged assets to fund day to day activities, when that source then ran dry. The first year season ticket sales were brought forward to Feb was to clear a £3m loan taken the previous autumn. Then we borrowed against TV money. Then we borrowed from HMRC and they didn't like that Link to comment Share on other sites More sharing options...
vulva Posted October 10, 2020 Share Posted October 10, 2020 15 minutes ago, mkowl said: You only have to look back to the period 2000 - 2010 to remind ourselves what happened when we leveraged assets to fund day to day activities, when that source then ran dry. The first year season ticket sales were brought forward to Feb was to clear a £3m loan taken the previous autumn. Then we borrowed against TV money. Then we borrowed from HMRC and they didn't like that Agree. The real pinch point will be January to April next year when we don’t get the income from season ticket sales. The robbing of Peter to pay Paul will suddenly stop. 2 Link to comment Share on other sites More sharing options...
Guest Grandad Posted October 10, 2020 Share Posted October 10, 2020 1 hour ago, mkowl said: At least 10% One of my clients is paying that to an investor in their business and said investor gets 40% of net profit on top If he's negotiated a deal to pay these guys 40% of our profits I take back everything I said The guys a genius Link to comment Share on other sites More sharing options...
S36 OWL Posted October 10, 2020 Share Posted October 10, 2020 1 hour ago, mkowl said: Can't argue with that. In any other business that is a red flag. Would this bloke chansiri has borrowed off had a valuation of the stadium done before lending? Link to comment Share on other sites More sharing options...
Guest mkowl Posted October 10, 2020 Share Posted October 10, 2020 14 minutes ago, Grandad said: If he's negotiated a deal to pay these guys 40% of our profits I take back everything I said The guys a genius True and brilliant for FFP purposes Link to comment Share on other sites More sharing options...
Guest mkowl Posted October 10, 2020 Share Posted October 10, 2020 3 minutes ago, S36 OWL said: Would this bloke chansiri has borrowed off had a valuation of the stadium done before lending? Well he would if he was sensible Link to comment Share on other sites More sharing options...
parajack Posted October 10, 2020 Share Posted October 10, 2020 18 hours ago, vulva said: Wealthy people use other peoples money. That’s how they get wealthy. And the cost of money is very cheap at present. So they will borrow as much as they can. How do you know? a loan at 2% as an example,would be a pretty good deal,but i have seen other examples where the rate was allegedly 8-10%.... My concern isnt if Mr Chansiri stays as such, but if at what point he decides to leave,& what he may allegedly leave us with.... Much is made about 'Business' & Businessmen'....'thats what they do' 'asset rich,allegedly cash poor' & so on........ We the fans/supporters are in the dark,& love our Club,its not a business to us...& thats why we are concerned.... 1 Link to comment Share on other sites More sharing options...
parajack Posted October 10, 2020 Share Posted October 10, 2020 2 hours ago, mkowl said: Can't argue with that. In any other business that is a red flag. In my opinion,only promotion to the Premier League,even one season would probably do it....I dont think we can realistically get there myself within 2 to 5 years. possibly take us 2 years to even rebuild. Link to comment Share on other sites More sharing options...
vulva Posted October 10, 2020 Share Posted October 10, 2020 13 minutes ago, parajack said: How do you know? a loan at 2% as an example,would be a pretty good deal,but i have seen other examples where the rate was allegedly 8-10%.... My concern isnt if Mr Chansiri stays as such, but if at what point he decides to leave,& what he may allegedly leave us with.... Much is made about 'Business' & Businessmen'....'thats what they do' 'asset rich,allegedly cash poor' & so on........ We the fans/supporters are in the dark,& love our Club,its not a business to us...& thats why we are concerned.... I know because that what I do for a living. Hope that helps. Link to comment Share on other sites More sharing options...
Guest Grandad Posted October 10, 2020 Share Posted October 10, 2020 (edited) A commercial loan with Funding Circle just now carries a 2.9% arrangement fee and then rates as follows; So just as a very rough guide - a £6.4m loan over 12 months would see us pay back £185,600 arrangement fee, £150,784 interest and the initial sum borrowed of £6,400,000.00 - £6,736,474.00 Total cost of loan £336,474.00. Thats not bad to be fair. Edited October 10, 2020 by Grandad Link to comment Share on other sites More sharing options...
@owlstalk Posted October 10, 2020 Share Posted October 10, 2020 4 minutes ago, Grandad said: A commercial loan with Funding Circle just now carries a 2.9% arrangement fee and then rates as follows They're the biggest mail spammers of them all I get their crap to my business every other day offering me loans etc 1 Owlstalk Shop Link to comment Share on other sites More sharing options...
Guest Grandad Posted October 10, 2020 Share Posted October 10, 2020 1 minute ago, @owlstalk said: They're the biggest mail spammers of them all I get their crap to my business every other day offering me loans etc Yes - I'm considering sending them a bill for servicing my shredder Link to comment Share on other sites More sharing options...
@owlstalk Posted October 10, 2020 Share Posted October 10, 2020 2 minutes ago, Grandad said: Yes - I'm considering sending them a bill for servicing my shredder Do you get it too? Every two days a massive A4 envelope, open it up and there's a brochure and letter offering to lend me thousands and thousands of pounds Was thinking of taking them up on their offer, lending thousands and thousands of pounds off them, and starting up a new business doing what they're doing but calling it a ZERO post spam version I'd make millions *business genius* Owlstalk Shop Link to comment Share on other sites More sharing options...
Mr Farrell Posted October 10, 2020 Share Posted October 10, 2020 Amazed people still believe he's loaded. 2 Link to comment Share on other sites More sharing options...
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