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Lowdesert

Hull FC under severe threat

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It, ll be down to the fans again, great fans and will probably start a fund. 

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To be fair to AP he is right outside of RBS/Nat West its been pathetic the way banks have treated small business (No disrespect to Hull FC but nowadays even a turnover of a few million is quite small) HMG should have guaranteed 100% on all the loans.

SL rules are quite strict nowadays on clubs going into liquidation point deductions relegation etc so there should be no reason why clubs like Hull FC should not be assisted.

 

Paul

 

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Was your point really that "give them a huge unsecured loan of tax-payers money; we know they'll pay the money back because they'll get a points deduction if they don't"?   If a club goes into liquidation, there's nothing to apply a points deduction to!

Why should Govt money be given to any business, where they have a record of running with unsustainable debt?

Having no assets and a business model based on making at least 1 semi-final a year, whilst running at full salary cap, has it's draw-backs.

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7 minutes ago, dboy said:

Was your point really that "give them a huge unsecured loan of tax-payers money; we know they'll pay the money back because they'll get a points deduction if they don't"?   If a club goes into liquidation, there's nothing to apply a points deduction to!

Why should Govt money be given to any business, where they have a record of running with unsustainable debt?

Having no assets and a business model based on making at least 1 semi-final a year, whilst running at full salary cap, has it's draw-backs.

Who has a record of unsustainable debt?  

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Pearson says the were turned down for loans because of historic debt.

That debt has not been paid down in the 9 years he has been in charge.

Having that debt and relying on a good cup/play-off run is unsustainable.

 

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9 minutes ago, Lowdesert said:

Who has a record of unsustainable debt?  

the wife

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the grass may be greener on the other side of the fence but the crows are just as black

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He doesn't even detail what he is moaning about, just that "the rules" are wrong. If every company with a large debt that they have failed to pay off over a long period were to receive a large loan 100% underwritten by government then I could see a host of businessmen licking their lips. Free money for old rope.

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Sport, amongst other things, is a dream-world offering escape from harsh reality and the disturbing prospect of change.

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22 minutes ago, dboy said:

Pearson says the were turned down for loans because of historic debt.

That debt has not been paid down in the 9 years he has been in charge.

Having that debt and relying on a good cup/play-off run is unsustainable.

 

Doesn’t 9 years of servicing that debt or even decreasing it carry any weight regarding credit?  Or is it a case of ‘you have a debt, therefore you will always be a risk’.  

The only thing Pearson will be reliant on are good crowds and season pass holders.

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17 minutes ago, Blind side johnny said:

He doesn't even detail what he is moaning about, just that "the rules" are wrong. If every company with a large debt that they have failed to pay off over a long period were to receive a large loan 100% underwritten by government then I could see a host of businessmen licking their lips. Free money for old rope.

TBF Johnny, that he doesn’t go into it, doesn’t mean they aren’t wrong.  Are the banks always straight with us?  

What are the rules btw?

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1 minute ago, Lowdesert said:

Doesn’t 9 years of servicing that debt or even decreasing it carry any weight regarding credit?  Or is it a case of ‘you have a debt, therefore you will always be a risk’.  

The only thing Pearson will be reliant on are good crowds and season pass holders.

Clearly not, otherwise the banks would have funded them.

Obvs.

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I see the article has been updated since first publishing, with Pearson now saying (or rather the hack adding)...

“I am being told I can’t have a loan during the COVID-19 crisis because of the accumulative losses the club took on board a generation before my ownership,” he explained.

“Since I bought the club we have had more profit than losses and yet it has taken them six weeks to come back and say you are not eligible for this loan.

 

“There has been a lot of public conversation about this small business loan and it’s about guarantees. It’s not. It’s about ridiculous criteria that the government and the bank are putting in the way of distributing this money and it’s a disgrace.

“Mr Hammerstein, the CEO of Barclays bank needs to communicate with the government and say his business cannot distribute loans because the rules are too onerous. He’s not even declaring how many loans he’s putting out there, do you know why? Because it’s embarrassing."


 

 

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5 minutes ago, Lowdesert said:

Doesn’t work like that.  So not obvs.

If the bank thought they were credit-worthy, they would have got credit.

So it's either a conspiracy against HFC, or they are not credit-worthy.

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2 minutes ago, dboy said:

I see the article has been updated since first publishing, with Pearson now saying (or rather the hack adding)...

“I am being told I can’t have a loan during the COVID-19 crisis because of the accumulative losses the club took on board a generation before my ownership,” he explained.

“Since I bought the club we have had more profit than losses and yet it has taken them six weeks to come back and say you are not eligible for this loan.

 

“There has been a lot of public conversation about this small business loan and it’s about guarantees. It’s not. It’s about ridiculous criteria that the government and the bank are putting in the way of distributing this money and it’s a disgrace.

“Mr Hammerstein, the CEO of Barclays bank needs to communicate with the government and say his business cannot distribute loans because the rules are too onerous. He’s not even declaring how many loans he’s putting out there, do you know why? Because it’s embarrassing."


 

 

There still isn’t enough in there to know what these rules are.  No doubt other clubs will be trying to get some ‘free money’ to help cash flow.  I thought Boris might have supported the northern powerhouse and rugby league towns.

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I hope so, but how can they justify giving RL money, without helping hockey or tennis or RU?

(The answer lies in community value, but it's not an easy argument to make when tax-payer funds are at stake).

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1 minute ago, Hullfan said:

Pearson is nothing but a whining baby, sooner he goes the better

He doesn't come out of this one well at all.

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You sound well informed, what is your financial background?

What is it about the Business Interruption Loan scheme that has been made deliberately difficult to access?

In what way is it ill-thought out?

FWIW, Martin Lewis (money saving expert), says it is an excellent scheme, though has highlighted where he feels banks have not fully co-operated. For instance, some banks pushing businesses towards commercial loans rather than BIL.

 

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Are Hull FC in a rented Stadium? If so will they still have to be paying rent to their landlords if they are not using the Stadium, and if all their staff are being payed 80% under the Government furlough scheme which the majority if the country are receiving why will the club go under without a loan?

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28 minutes ago, dboy said:

You sound well informed, what is your financial background?

What is it about the Business Interruption Loan scheme that has been made deliberately difficult to access?

In what way is it ill-thought out?

FWIW, Martin Lewis (money saving expert), says it is an excellent scheme, though has highlighted where he feels banks have not fully co-operated. For instance, some banks pushing businesses towards commercial loans rather than BIL.

 

I imagine Hull fail on the 'Business in difficulty' tests, specifically from a quick look at their accounts the first one about accumulated losses.

We've found the same thing applies to the company I work for, for similar reasons: we're a good ongoing business, trading profitably with positive cashflows but the historic accumulated losses rule us out of the similar criteria for the loan scheme for companies the next size up (CLBILS):

 

What businesses meet the ‘business in difficulty’ criteria?

A ‘business in difficulty’ is one that, as at 31 December 2019, had:

  • accumulated losses of more than half of its subscribed share capital for limited companies, or for unlimited liability companies, its capital; or
  • started, or had fulfilled the criteria to be put into, collective insolvency proceedings; ?or<>
  • previously received rescue aid that was yet to be reimbursed (or, in the case of a guarantee, terminated); or
  • received restructuring aid, and was still under a restructuring plan; or
  • (where it not meet the SME criteria) has fallen below solvency ratios for the previous two years.
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1 hour ago, Lowdesert said:

TBF Johnny, that he doesn’t go into it, doesn’t mean they aren’t wrong.  Are the banks always straight with us?  

What are the rules btw?

The "rules" are that, unless someone else underwrites the debt, they won't lend you money that they aren't certain of getting back.


Sport, amongst other things, is a dream-world offering escape from harsh reality and the disturbing prospect of change.

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31 minutes ago, Harry Stottle said:

Are Hull FC in a rented Stadium? If so will they still have to be paying rent to their landlords if they are not using the Stadium, and if all their staff are being payed 80% under the Government furlough scheme which the majority if the country are receiving why will the club go under without a loan?

Owned by KCOM/Hull City Council according to Wikipedia. 

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