Stuff the banks - John Lewis issues a retail bond
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I know I’m not alone amongst small business owners in thinking dark and negative thoughts about the banking fat cats who are squeezing the life out of entrepreneurial Britain. They continue to make business lending (particularly to SMEs) as hard as possible and reluctantly part with their case at typically penal interest rates and terms. So it is with some relief and more than a little admiration that I noted the launch of a retail bond by high street retail star John Lewis Partnership.
Why pay a bank up to 20% on an overdraft or 12-15% on a medium term bank loan when you can raise up to £50m from your own staff and customers at a much more attractive 4%? The retail bond concept is not new, but it is a welcome announcement because it is a win-win. John Lewis Partnership is able to raise fresh finance at a reasonable cost of capital; the savers who invest in the Partnership Bond get a much better rate of return than the obscenely low savings rates being offered by the (very same) banks.
The John Lewis retail bond announcement reminded me of what Will King (Founder and CEO of King of Shaves) did a few years again with his shaving bonds. Genius financial and marketing idea all rolled up into one.
Anyone fancy investing in a tutor2u Bond?
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