Bank Of England Base Rate set to go up and how it affects CUFC 1921

[_Stefan_Kuntz]

Currently the Bank Of England Base Rate Of Interest is 4.25% per year. Various financial media expect that at the next meeting of the 'powers that be' at the Bank Of England the Base Rate will rise by 0.25% to 4.5%.

The interest on business loans typically floats 3% above the Bank Of England Base Rate, so it will become 7.5% per year for the 1921 loan from Philip Day's Purepay Retail Limited. If the currently outstanding loan from Purepay Retail Limited is £2.6 million then the yearly interest payable by 1921 will become 7.5% of £2.6 million, which is £195,000. But as interest not paid is added on to the capital value of the loan monthly and then the interest for the next month is charged on that new amount, the figure of £195,000 per year is an under-statement. No payments of capital or interest have been made since the inception of the loan.

Since Purepay Retail Limited has ceased sending Letters Of Comfort to the 1921 auditors the loan is now payable on demand and thus may be beyond the original agreed term. A penalty rate of interest may well be being charged.

But let's not bother about such trivia as this loan killing CUFC 1921, which is the football club. CUFC Holdings is just a bucket containing 93.5% of the CUFC 1921 shares. Let's just look at the League Two table and whenever anyone mentions the finances we can put our fingers in our ears and drown out such common sense with a constant "La-la-la-la-la".