On Mon, 18 May 1998 23:30:51 +0100, Jel Coward wrote:
>In article <[log in to unmask]>, Javed Sheikh
><[log in to unmask]> writes
>>Am shopping around for 100% finance to purchase new premises. Single handed
>>with a view to bringing in a partner within 12 months. GPFC rate at 7.92%
>>fixed for 8-13 years or 8.25% variable. Notional or Cost Rent ? Or are
>>combinations possible which make more sense. Any (decent !) suggestions on
>>raising capital at a more competitive rate, for this purpose, at a time
>>when PCG's don't have clear agenda's or guidelines. Guidance appreciated.
And Jel replied:
>Have you looked at PFI?
The thing about PFI is that it is 'in vogue'. The term is actually
meaningless and a bit of a con.
Everybody knows that the cheapest borrowing is that of government then
the banks.
Consider how I financed my premises 3 years ago on *notional rent*
(i.e. Risk takes a risk!):
I went to the bank and said: can you lend me some money to build a
surgery?
Bank: we need business plan
Risk: here is one I prepared earlier
Bank: who is the contractor?
Risk: me
Bank: we need an idea of likely notional rent payable when building is
commissioned
Risk (to District Valuer): please advise likely rent based on these
drawings
DV (after a lot of persuation): OK, here it is.
Bank: we are happy with that, here is your money (in stages etc.)
Risk builds surgery as contractor, becomes site manager, clerk of
works and materials buyer.
This is PFI, is it not?
Do not get yourself entangled in all the hype and jargon. You might
also end up being taken for a ride.
The loan I negotiated with the bank (300K) was at 1% above base rate!
Can you show me *any* PFI outfit that can beat that?
As long as premises support in the form of cost rent ot notioal rent
continues, you have what the banks call 'Blue Chip' lending. No other
business in the land has this blue chip status. This is very low risk
lending.
Unless, of course, PCG Inc. shafts it ;-)
If you want nity gritty details, happy to discuss.
Ahmad
________________________________________
Dr Ahmad Risk
http://mednetics.org
home: +44 1273 724866
work: +44 1737 240022
fax: +44 1737 244660
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