Sources of finance - the bank overdraft rip-off
Thursday, May 28, 2009
Print
Email
Tweet This!Save to Favorites
Recommend on Google+
We got a letter from the Bank of Scotland last week offering us a very generous bank overdraft for the tutor2u business…
Not that we asked for an overdraft. We’ve had a positive cash balance since day one and I can’t really imagine why we would need a bank overdraft now as part of our financial structure.
Still it was nice to get the offer…until I looked at the rate of interest on offer.
A quick reminder. The Bank of England base rate is 0.5%.
The Bank of Scotland offer for a bank overdraft? Go overdrawn by up to £50,000, on which the interest rate will be 17.5%
That’s 17 percentage points higher than the base rate - for a low-risk, profitable business that has never been in debt. How generous.
It seems we are not alone. The media feature lots of small businesses that are complaining that the fall in the base interest rate has not been followed by a reduction in the overdraft and loan rates charged by the banks. The chart below illustrates that. So much for the banks wanting to do their bit to help corporate Britain pull us out of recession
blog comments powered by Disqus
Buying-in to the Facebook culture [5 Feb 2012]
Strategies to revive the High Street: Mary Portas reports [13 Dec 2011]
The Rise and Fall and Rise of Gerald Ratner [27 Nov 2011]
International operations decisions - Adidas trainers for $1? [26 Nov 2011]
Cut price cup cake deal goes wrong…... [22 Nov 2011]
Unilever hit by rising costs [6 Nov 2011]
Banana Smoothies & Interest Rates [5 Nov 2011]
Batten down the hatches - strategies for the next downturn [24 Oct 2011]
Revision Quiz - Sources of Finance for a Startup [21 Oct 2011]
Shoppers switch stores as income patterns change [11 Oct 2011]
Profits dive and put pressure on liquidity - the Distress Monitor [29 Sep 2011]
Revision Presentation - Risks and Rewards to Enterprise [7 Sep 2011]
Revision Presentation - Adding Value [7 Sep 2011]
The puzzle of rising profits [5 Sep 2011]
Tesco pulls out of Japan [4 Sep 2011]
Risk-free Curry? Searching for the Right Growth Strategy [29 Aug 2011]
Luke Johnson on sources of finance for a startup [29 Aug 2011]
Entrepreneurs and Calculated Risks [25 Aug 2011]
Evaluation in business essays? Its just like going on a date… [22 Aug 2011]
Samsung seeks a ban on Apple products [30 Jun 2011]
Your suggestions for new Business Studies resources & training [9 May 2011]
HMV Strategy - Death of a Billion Downloads [24 Apr 2011]
Is the golf business coming out of the bunker? [7 Apr 2011]
Recession? Hair today, gone tomorrow [6 Apr 2011]
The UK Economy - Economic Growth GDP [15 Mar 2011]
The UK Economy - Unemployment [13 Mar 2011]
Partners in profit - the JLP way [10 Mar 2011]
Stuff the banks - John Lewis issues a retail bond [6 Mar 2011]
The Profit Margin Bloodbath of UK Recession [6 Mar 2011]
Introducing a new kind of business organisation - the benefit corporation [17 Feb 2011]
CSR - What is “Creating Shared Value”? [16 Feb 2011]
Dont make a hash of it! Using hash tags on Twitter [15 Feb 2011]
Michael Porter - Shared Value and the Limitations of CSR [15 Feb 2011]
Sources of finance - the attraction of franchises [8 Feb 2011]
CSR - The Classic Milton Friedman Clip [5 Feb 2011]
The Year of Corporate Philanthropy [31 Jan 2011]
How technology is changing the recruitment process [17 Jan 2011]
Q&A - What is “profit quality”? [7 Jan 2011]
BUSS1 Revision Quiz - Sources of Finance for a Startup [13 Dec 2010]
Starter / Plenary Activity - The Business Studies Categories Game [6 Dec 2010]
Dominos Pizza - Growth & Strategy (Part 3) - Smart Marketing [26 Nov 2010]
Dominos Pizza - Growth & Strategy (Part 2) - Innovation, Service and Smart Operations [26 Nov 2010]
Dominos Pizza - Growth & Strategy (Part 1) - Driving Competitive Advantage [26 Nov 2010]
Euro Disney - an HRM & Finance Nightmare? [24 Nov 2010]
Liabilities - firms worry about what they owe [24 Nov 2010]
Recession-proof production at Fiat [20 Nov 2010]
JCB - A Great Case Study for Business Students [19 Nov 2010]
Cash flow Clue-doh! The Mystery is Revealed… [2 Nov 2010]
Start-ups - a surge in new businesses post recession [2 Nov 2010]
Revision Games - Sources of Finance Definitions [1 Nov 2010]
Profits up at Amazon - but so are costs [22 Oct 2010]
Bonus system to encourage safety improvements at BP [20 Oct 2010]
tutor2u on Smarta - An Interview with Jim [18 Oct 2010]
Google, Profits and Diversification [16 Oct 2010]
Insights from an Entrepreneur - Fraser Doherty (SuperJam) [10 Oct 2010]
The Frost Report does Stakeholders [9 Oct 2010]
Culture & Change - The Challenge Facing Nokia [27 Sep 2010]
My Visit to Smarta.com [27 Sep 2010]
Who ate all the pies? [17 Sep 2010]
Sources of finance - bank loans down by £28 billion [15 Sep 2010]
Businesses prepare for the double-dip [13 Sep 2010]
Can small firms shrug off their recession trauma? [2 Sep 2010]
A beginners guide to GDP [30 Aug 2010]
Recession Strategy - Manufacturing Emerges Leaner and Fitter [25 Aug 2010]
Tutor2u on Facebook [24 Aug 2010]
Lesson Worksheet - Adding Value [10 Aug 2010]
Cashflow-Cluedoh! [10 Aug 2010]
Lesson Worksheet - Enterprise & Entrepreneurs [9 Aug 2010]
Lesson Worksheet - Gross Profit Basics [5 Aug 2010]
Essential business reading for the summer! [5 Aug 2010]
Nissan profits from a recovery in demand [30 Jul 2010]
Lesson Worksheet - Financing Business Growth [16 Jul 2010]
New BBC Resource: Start Up Stories [25 Jun 2010]
Dark days for the UK nightclub market [21 Jun 2010]
Emerging Stronger - How UK Businesses Responded to the Recession [14 Jun 2010]
BUSS4 data - what happened to business investment in the UK recession? [14 Jun 2010]
Is the mega-merger falling out of fashion? [7 Jun 2010]
BUSS4 - Recession Strategy Lessons from Four Female Entrepreneurs [6 Jun 2010]
Gearing Up for BUSS4 [6 Jun 2010]
Emerging from Recession - Manufacturing Leads the Way [1 Jun 2010]
Strategy Case Study - Vauxhall/Opel restructuring [24 May 2010]
BUSS4 UK Recession - Data Burn [15 May 2010]
Profit seeking paradoxes in an oblique world [15 May 2010]
UK Recession - Hotels Suffer Despite the Trend towards Staycations [3 May 2010]
Why Coffee Shops did so well during the UK Recession [25 Apr 2010]
A good example to use when explaining what firms do as they come out of a recession [22 Apr 2010]
Girl Power [12 Apr 2010]
How to make a million before lunch! [12 Apr 2010]
Recession Survival Strategies Cost UK SMEs £16bn [31 Mar 2010]
UK Recession - What Happened to Redundancies? [30 Mar 2010]
Unilever in the recession - the CEO on strategy [25 Mar 2010]
How firms can make the most of the recovery [20 Mar 2010]
Wipeout Challenge - UK Recession [15 Mar 2010]
Motivation and management at John Lewis [11 Mar 2010]
Data watch - what happened to consumer spending in the UK recession? [4 Mar 2010]
BUSS4 and British Airways - a marriage made in heaven [1 Mar 2010]
Whiteboard Challenge - Drawing UK GDP [28 Feb 2010]
Recession strategy - what happens when a market dives by 30%+? [28 Feb 2010]
HRM priorities as firms exit the recession [27 Feb 2010]
Strategy in a recession - cost optimisation not cost minimisation [25 Feb 2010]
BUSINESS TEACHER RESOURCE NEWSLETTER
Get first news of business teaching resources, ideas and other materials from tutor2u. Over 9,400 business teachers from the UK and around the world receive our regular teacher email newsletters. Sign up for free here!
Popular Topic Tags
recession, demand, prices, price, unemployment, profit, economics, costs, investment, inflation, supply, employment, trade, competition, gdp, risk, china, debt, euro, entrepreneur, capacity, production, innovation, downturn, tutor2u, revision, pay, exports, manufacturing, confidence, profits, food, incentives, banks, strategy, globalisation, aqa, expectations, oil, csr, usa, startup, retailers, housing, productivity, sterling, supermarkets, takeover, google, economies of scale, mortgage, cash flow, advertising, quiz, leadership, property, buss4, tesco, economic growth, video, efficiency, enterprise, motivation, stakeholders, apple, deflation, corporate social responsibility, ebea, market share, airlines, pricing, taxation, merger, slowdown, bank of england, acquisition, interest rates, market failure, borrowing, competitiveness, sustainability, product life cycle, credit crunch, budget deficit, aqa business studies, facebook, twitter, aqa business, bbc, nelson thornes, philip allan updates, starbucks, philip allan, monopoly, diversification, recruitment, organic growth, stocks, training, oligopoly, starter activity, shareholders, uk economy, poverty, emerging markets, dollar, government failure, retailing, management, suppliers, buss1, marketing mix, tim harford, cpi, branding, opportunity cost, breakeven, government spending, hodder education, vat, product, customer service, eu, losses, wages, evaluation, india, external growth, wealth, environment, edexcel, location, promotion, technology, information failure, business studies revision, sources of finance, franchise, aqa gce business, elasticity, regulation, spare capacity, welfare, jobs, economic cycle, marketing, zondle, strategic direction, british airways,View all tags for the Business Blog
