Banks and loans - credit crisis?
 

Hi to all,

Just a friendly note to say that HSBC and Barclays have now completely stopped doing Professional Studies loans for an ATPL. I'm over the moon about this after spending hours on a business plan which the bank manager at HSBC commented was one of the best he had seen for a very long time (with the help of my fathers input) and even during the presentation he was sure that the funding was still available. Unfortunately Barclays have also gone south on this issue. :ugh:

Whilst this thread may seem pointless and negative I actually wanted to write this to say to anyone in my position at the moment....DO NOT GIVE UP! If you are half as eager to get into this proffession as I am, and for the right reasons, then DO NOT GIVE UP!

Anyone out there in this crap situation that doesn't know where to try next reply to this and maybe between us we can come up with some idea's!!!

Cheers

Chris

Try different branches. Each branch has it's own rules etc. and can be different from the same bank just up the road.

I know it's a lot harder to get PSLs for flying training these days, but it's not impossible!

If you walk in and ask for 70k then you are in for a hard time, but say you need 15k for a CPL and FI rating then you are in much better territory. Excellent job prospects (shortage of instructors) less financial risk for them etc.

You have to give and take with the banks quite often and give them an incentive. Usually this is of the form of 'I can afford to pay you back if I fail at flying because...'

Banks are hard cases to crack, but it can be done.

Bri

Hi,

Well I did go to the Poole head office and speak to a very high up business specialist (through contacts at my current work). Still a big fat no.

However I did do a comprehensive section in my business plan which covered "How would I pay you back if I couldn't get a flying job". I nailed that part with, I'm currently an Accountant and can earn 'X', even produced a copy of the latest Hays Finance and Accounting Salary guide proving as much.

After speaking with parents I'm now looking at borrowing £50k SECURED! So no way I can mess it up! Not that I intended to anyway, but you catch my drift.

One big headache!!!

Welcome to the Global Credit Crunch.

WWW

Firstly, this doesn't actually surprise me at all. If you take a totally over-subcribed industry, at saturation point with low houred frozen ATPL holders, and then add the number of pilots that are being added each year to those figures, then the risk factor for the banks in terms of obtaining the money back would be much greater. For the bank, us student pilots are seen as an investment - they put some money in, they get a lot back in a few years time. However, with the number of f(ATPL) holders dramatically exceeding the number of jobs available, then the banks might well be starting to come round to the view that there is just too much risk in these loans.

In short, it's a problem that we've heard mentioned time and time again - too many applicants, not enough places.

In a final note, I assume this is likely to have a negligable impact on us loan holders already?

OAT and their local HSBC still do it and I believe Cabair and their local HSBC also still do PSL.

BBVA UK will loan for FTE and OAT so you may want to try them.

the saga continues . . .. .
 

Barclays have now also refused the application unless it can be paid back during training, which is basically impossible.

They are happy with my crudentials as far as actually being able to pay back the loan (with the help of my fathers business) should I not be able to get a flying job but with the banks tightening up after months of bad publicity it looks like bleak time ahead for any new wanabee's.

For you guys who are currently training...all I can say is keep your heads up, jobs are bound to appear again, Tourism is officially the fastest growing industry in the world and has been for some years. Being an Accountant I even went through the Consolodated Profit and Loss figures with the bank and showed that the vast majority of Airlines (Passenger and Cargo) are reporting consistent growth in profits year on year, whilst this continues they will only expand and order new aircraft.:ugh::ugh::ugh::confused:

I thought they stopped doing the loans ages ago (ex-special agreements with the likes of Oxford etc).

To understand why the banks have done this just do a search for some of the threads on "bankruptcy" on this forum and thank the folks who were actively encouraging people to shirk their responsibilities and go down the route of declaring yourself bankrupt post training to avoid paying back training costs.... this is a simple derivative of that attitude... if enough wannabe pilots don't pay back what they owe then the banks are quite right to pull the plug. Don't blame the banks blame those that have gone before you and not honored a contract they entered with the banks when they started their training :{

But the logic and practicalities of going bankrupt post training still hold good. You may no longer be able to finance the training via a career development loan but you can still get all manner of unsecured loans and credit for general use.

Career Development Loans were always slightly suspect for funding basic training. As their name implies they should really only apply to, say, a Flying Instructor wanting to fund an IR or Type Rating which would allow him to 'develop' his already started career.

WWW

The bank that I spoke to (where I have been a customer for 7 years) said that airline training was not likely to attract funding because the market is too volatile. Lots of jobs one minute and none the next.

Flight instructing however was something they were willing to consider provided I paid for the PPL and ATPL groundschool. They would effectively pay for the CPL and FI rating with a Professional Development Loan. And that was only 6 weeks ago!

B

HSBC won't lend you the money, not a surprise, you can thank all the "clever" people before hand whom thought that declaring backruptcy was the answer.
There is no reason in the world why a bank should lend you the money other than if you have the appropriate credit history and income to support the loan. So if your current income and credit history is good enough you can get a standard unsecured loan for 25000 with a three month deferrment from any mainstream bank. If it isn't then you need to work and save for longer.

Well yes thanks very much to the "clever" folk out there who have now completely knackered anyone else's chances! The bank are right to be cautious with all the bad press that they have had but then again it's not like they didn't deserve it.

I have proved to them that I can pay back the loan, flying or not, I have provided security in the form of my father, I have spent hours and hours doing a business plan only to be told that "oh no sorry we've recently stopped doing them for ATPL's" Don't get me wrong, I'm not on here to have a good whinge, but to come so close and get shot down is a bit pants.

However I am now looking at what other banks can do and in the mean time saving everything I can from my day job to self fnd as much as possible. It's all fun but then again no pain no gain. :)

"But the logic and practicalities of going bankrupt post training still hold good"
:rolleyes:
Seems to be a magnet somewhere near your moral compass?? and as such the likes of chris-squire suffer as a result of this sort of attitude as the opportunities that were available to others to finance their training are now not availiable to him. Shirking your responsbilities be they debt or otherwise strikes me as a cowardly and selfish way out of agreements you have signed up to in all but the most extreme circumstances.
Anyway this has been covered before many times and each individual has his/her own level of what they consider to morally acceptable behaviour. Just a shame others have to suffer the consequences through no fault of their own

The banks make enough money out of "us" as it is......£7bn profits for Barclays and the like. I think it's disgusting!!!

As for people declaring themselves bankrupt...good for them, i think it's great that they have finally managed to break out of that downward spiral which was instigated by the banks in the first place.

I do not think being bankrupt is the answer at all, but i do think that the banks have a lot to answer for when it comes to low paid/people with limited means. They are the banks bread and butter...and they know it.

The old adage cream always rises to the top still rings true. Those that find a way and battle through all of the challenges will make it through and good on em. Along the way they will probably learn more from the knocks and have greater experiences to share at interview time as well. It might just tip the scale showing the interviewers how you are made of tough metal.

Grass Strip, Pot Kettle - Great comments!!! It is the likes of me and others like me who genuinely struggle to get our foot on the ladder that get seriously p*****d off with those who think that bailing out of financial responsibility is the right move and I forsee times when employers will be taking a dim view of those who do so, after all, the airlines want someone that they can rely on. Hardly a great demonstration of that now is it!

These challenges build character and at the tender age of 21 I do have time on my side to a degree but I'm soooooo eager to ger flying, whether it be in the right hand seat of a 737 or a TP, I don't care, just want to fly for a living! The money genuinely doesn't motivate me, as long as I can put a decent roof over my head, pay the bill's and look after my family then that's fine by me. I would quite happily take a reduced salary for the rest of my career if it meant that I got a flying job.

Sounds desperate but at least I want this for the right reasons I guess.:)

Ah yes its the banks fault.... certainly not the responsibility of the individual.

I hate to break it to you but the big UK banks will make c£30bn this year in net profit not £7bn... c50% of which comes from overseas. How much money do you think the banks make from "low paid people with limited means"?? Believe me it is bu**er all, if it wasn't for the government's social inclusion rules they would have nothing to do with that customer base.

The profits also means the banks are paying over £10bn in taxes a large slug of which helps support the UK public sector. XL319 do you have any idea how Barclays makes it profits?? Or the benefits that you enjoy from the UK having a healthy financial services industry? What is it with everyone wanting to knock successful businesses in the UK??

If you don't like them don't use them... why should banks provide a service to you for free??... you don't work for free do you? (Unless you are a new pilot at Ryanair of course... :O)

Anyway we digress..... chris-squire good luck with finding another route to fund your training, you have my sympathy but you at least seem to have your head screwed on so I'm sure you will get there in the end :ok:

Well coming from a financial background I know just how much the banks make. As I mentioned earlier, when I was reading through the consolodated trading P&L for the major UK carriers it now makes me laugh when the likes of BA and Virgin come out with their sob stories in Accounts publications about how much money they aren't making per seat! I am convinced that the jobs market will pick up again, hopefully in about 2 years time whien I will be looking.

As for those currently advocating going bankrupt...:D well done, you're all very clever and have done this industry a world of good. Good luck when applying for a mortgage!
:mad:

In the mean time, one way or another I will be flying for a living over the next 18 months. Look out airlines..here I come! :)

You could always save up ... :suspect:

I am already saving up but even with being in a reasonably well paid job its a tad hard to save up £50k +. Maybe a few thousand but by the time I had enough I would have a mortgage around my neck and probably kids too. Don't take that as meaning that I'm not willing to go down that road as I may have to if all else fails but I figure the younger I am the more chance I have, and also, trying to save that sort of money when I have a mortgage will be near impossible. I know that sounds very defeatist but this industry requires me to be realistic.

Cheers anyway though.