If you owe the bank £100

[Gwylan]

...it's your problem. If you owe them £100m it's theirs.

I've seen this saying on a few posts recently, here and on other forums.

Where's the cut-off point - at what point does your problem become the bank's ... particularly for football clubs.

Just interested like

 

[stu7878]

.... awaiting edit.

 

[Jim D]

For a large club (ie one with regular gates greater than 10K) the limit's quite high (well over £1M). Banks and other bodies will try to estimate the cash loss if the club goes under still owing against the goodwill loss if they don't help out. Obviously for Sheff W it's at least another £750K.

 

[severnside gull]

Presumably you mean £100 is your problem / £100million is theirs. The difference is largely that between individual (including small business) debt and corporate debt and the pivotal point is that at which foreclosure would return them significantly less than continuation of the debt.

Culturally the banks are inherently bullies and will always choose to pick on the smallest in their community just like big kids (and smaller ones who find strength by joining the gang) in the playground.

 

[Trufflehound]

How much did Chester City owe? Clearly that was the club's problem.

 

[Billy the Fish]

Where's the cut-off point - at what point does your problem become the bank's ... particularly for football clubs.

Just interested like

It depends how much money they've got in the bank....

 

[Jim D]

How much did Chester City owe? Clearly that was the club's problem.

I would say that Chester (and Ilkeston) didn't have a very large fanbase and there was no perceived damage to be done by them. Maybe a few closed accounts locally, but not much else. On the other hand, Sheff W have fans all over and probably some of them are quite wealthy and run businesses. The bank couldn't run the risk that they would transfer business for the sake of £750K (and probably a very good chance they would get it back anyway).

 

[beorhthelm]

i depends on how likely you are to recover the debt and turn things around. in the case of football clubs they get a long lead as the bank knows they are good for the cash flow. one of the banks bascially owns Liverpool, they are quite happy for the situation to continue as they know the interest and some of the capital is reliably repaid and will be pretty much forever. same with Wednesday, they know they will see the money so lend them some more. with individuals thats much moer difficult to show, so they cut thier losses more readily.