fbm
Blue tinted optimist⭐🦐
Look, rule 1 in business is always try and use someone else's money rather than your own.
By deferring the tax bill, especially as HMRC charge interest on unpaid tax currently at 0% (or very close to it) it becomes a very cheap loan.
I genuinely believe that RM was hoping to defer and defer and defer the tax bill until the 11th hour and then some. He isn't the only businessman to do this and it is not, despite some assertions on here, financial mismanagement.
It is all to do with the legal identities of companies and individuals - and this is where the waters get muddied.
But once companies start borrowing money, then financial institutions want personal guarantees from the directors.
The key here is to make the company survive on it's own rather than keep bailing it out with finance, which cripples it in the long term. That means that, on occasions, creditors are not paid on time. Every company does it. It's how they survive.
Once the banks know there are personal guarantees, they can be as ruthless as they like as their assets are no longer at risk. So - if RM offers up personal guarantees for any borrowing, then it's his own personal assets at risk. I wouldn't do that (having done it once and nearly lost everything) and most professional advice is that it shouldn't be done. It really is a last resort.
So - getting any money from the banks is a non starter. Or at least it has been, until now.
What HMRC have done is forced an issue. They've given RM a week to stop borrowing their money.
Everyone here has been wobbling on about a crisis, it's the worst time ever, and jesus I'm not saying anything good has happened today. However, things could get far worse before the word "crisis" becomes apparent.
At this moment in time, we still have a fairly decent first XI (ok, we're a couple of defenders short and we have no reserves but we can still compete on the pitch). When our youth teamers are regularly in the side, we can claim crisis.
We aren't yet in administration with a 10 point deduction. When or if we ever are, it's not good, but doesn't mean we'll go down. When we are in the bottom 2 of league 2, then we can claim crisis.
We still have a decent following. When the crowds are down to 1000 again, we can claim crisis.
We still have the best management pairing this club has ever had. When we see Dick Bate as a viable option for caretaker manager, then we can claim crisis.
We may not own the ground but whilst we still have RH and the new stadium in the pipeline we are no worse off than we were last week. When we have to groundshare with Gillingham, we can claim crisis.
At the moment (or at least before today), taxman aside, RM was pretty much in control of all monies owed. He was the main creditor.
Now however, he is in danger of losing out big time. Not only that, didn't the accounts show directors loans outstanding? They also will be standing to lose. So, it's in the directors interests to raise £700K in a week.
It isn't a massive amount of money in business terms. If there was nothing on the horizon, then I'm sure any prudent businessman would not throw good money after bad. They'd let the club go into administration and start again, hopefully coming out stronger in a few years time. It's happened to plenty of clubs before and it'll happen again. The fault doesn't lie necessarily with RM - football as an industry is just not viable as too much is paid out in wages. Don't forget, we've had people on here moaning that we weren't splashing the cash and breaking the wage budget to get certain players. I can't be bothered to check, but I'll wager they are the same ones who are moaning now.
Now that would have been financial mis-management.
Personally I fully expect RM to have this debt settled by next week. He may have to bite the bullet and offer that personal guarantee to a bank. HMR&C's stance has effectively meant that if he doesn't, he personally loses loads anyway, so he may well take the view that it now won't make any difference.
The banks at the moment are lending. All you have to do is offer some collateral.
By deferring the tax bill, especially as HMRC charge interest on unpaid tax currently at 0% (or very close to it) it becomes a very cheap loan.
I genuinely believe that RM was hoping to defer and defer and defer the tax bill until the 11th hour and then some. He isn't the only businessman to do this and it is not, despite some assertions on here, financial mismanagement.
It is all to do with the legal identities of companies and individuals - and this is where the waters get muddied.
But once companies start borrowing money, then financial institutions want personal guarantees from the directors.
The key here is to make the company survive on it's own rather than keep bailing it out with finance, which cripples it in the long term. That means that, on occasions, creditors are not paid on time. Every company does it. It's how they survive.
Once the banks know there are personal guarantees, they can be as ruthless as they like as their assets are no longer at risk. So - if RM offers up personal guarantees for any borrowing, then it's his own personal assets at risk. I wouldn't do that (having done it once and nearly lost everything) and most professional advice is that it shouldn't be done. It really is a last resort.
So - getting any money from the banks is a non starter. Or at least it has been, until now.
What HMRC have done is forced an issue. They've given RM a week to stop borrowing their money.
Everyone here has been wobbling on about a crisis, it's the worst time ever, and jesus I'm not saying anything good has happened today. However, things could get far worse before the word "crisis" becomes apparent.
At this moment in time, we still have a fairly decent first XI (ok, we're a couple of defenders short and we have no reserves but we can still compete on the pitch). When our youth teamers are regularly in the side, we can claim crisis.
We aren't yet in administration with a 10 point deduction. When or if we ever are, it's not good, but doesn't mean we'll go down. When we are in the bottom 2 of league 2, then we can claim crisis.
We still have a decent following. When the crowds are down to 1000 again, we can claim crisis.
We still have the best management pairing this club has ever had. When we see Dick Bate as a viable option for caretaker manager, then we can claim crisis.
We may not own the ground but whilst we still have RH and the new stadium in the pipeline we are no worse off than we were last week. When we have to groundshare with Gillingham, we can claim crisis.
At the moment (or at least before today), taxman aside, RM was pretty much in control of all monies owed. He was the main creditor.
Now however, he is in danger of losing out big time. Not only that, didn't the accounts show directors loans outstanding? They also will be standing to lose. So, it's in the directors interests to raise £700K in a week.
It isn't a massive amount of money in business terms. If there was nothing on the horizon, then I'm sure any prudent businessman would not throw good money after bad. They'd let the club go into administration and start again, hopefully coming out stronger in a few years time. It's happened to plenty of clubs before and it'll happen again. The fault doesn't lie necessarily with RM - football as an industry is just not viable as too much is paid out in wages. Don't forget, we've had people on here moaning that we weren't splashing the cash and breaking the wage budget to get certain players. I can't be bothered to check, but I'll wager they are the same ones who are moaning now.
Now that would have been financial mis-management.
Personally I fully expect RM to have this debt settled by next week. He may have to bite the bullet and offer that personal guarantee to a bank. HMR&C's stance has effectively meant that if he doesn't, he personally loses loads anyway, so he may well take the view that it now won't make any difference.
The banks at the moment are lending. All you have to do is offer some collateral.
