Central Banks Step Up Battle to Contain Crisis - WSJ.com
The math of starting a business in Britain:
Borrow 1,000,000 pounds. Payback loan in 5 years.
Business Profits = ?
Well, the direct equity to be paid back per year would be (1m/5 ) 200,000.
Since this would be subject to tax (at 50%), then just to pay back the loan, the borrower would have to earn 400,000 (that is before any money for living expenses).
So for 1 million in borrowing, the business would have to generate 400,000 per year to pay it back in 5 years.
Gee - how many businesses can generate that kind of return - before of course any profits to the investor or entrepreneur?
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