Saturday, May 30, 2009

RE: HSBC sorry for saying it won’t lend to pubs

This isn't a complicated thing really, banks are scared of pubs, particularly if they are tied. Why? Because the risk is too high. Nothing to secure a loan or overdraft against and a diminishing income stream from which to repay the debt. Without a second charge banks are exposed and they know the revenue and the pubcos will be in there like a shot before them if cashflow dries up.

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