Rangers Announce Secure Loan - £1.5m. Repayable by 1st Sept

[BrahimHemdani 1]

It's looking at the effective annual rate of interest. Calling it a set-up fee is just trying to trick people into not realising how expensive it actually is.

 

It doesn't matter what they call it, the annualised cost works out at 30%.

 

The Annual Percentage Rate (APR) is indeed 30% i.e. that is the nominal rate taking account of the interest rate per compounding period multiplied by the number of such periods per year (two in this case). So if the exercise is repeated Laxey get £300,000.

 

However, if it was interest rather than a flat fee, it is arguable that the Annual Effective Rate (EFF) is actually 32.25%. This is the interest rate compounded yearly that achieves the same future value as the APR. The EFF is the rate that you actually earn for the period of time stated i.e. 6 months in this case. In other words if you charge 15% per 6 months on £1,000,000 you will get back £1,322,500.

[BrahimHemdani 1]

this is 45 quid off of every season book for next year.

 

The interest is approx. £4.28 per season ticket (assuming 35,000).

 

The loan's not relevant from that point of view if it's repaid; because part of our expenditure is always financed by ST sales.

[the gunslinger 3,366]

The interest is approx. £4.28 per season ticket (assuming 35,000).

 

The loan's not relevant from that point of view if it's repaid; because part of our expenditure is always financed by ST sales.

 

but it is. because 45 quid from every season book will now not go to the club for next seasons squad.

[ranger_syntax 4,422]

Like BD, the security doesn't bother me but it's more a worry of that if we need this bridging loan now, what about future years?

 

Will we need £1.5m next February? Or double that? Triple?

 

What about being able to improve the squad?

 

All these increased/unaffordable costs and we still haven't seen any sort of staff departures at any level within the club.

 

This is what worries me. We might end up in a vicious circle.

 

As strange as it sounds I've been hoping for the season ticket prices to increase and I now think it is a certainty.

 

In addition to a price rise I expect we will see the squad reduced rather than increased. I know Cribari will be off of the wage bill but who else?

[BrahimHemdani 1]

At current prices is it not around 6-7000.season tickets?

 

Yes but that's not really relevant since we always finance a significant chunk of expenditure from ST sales.

 

It's a kind of mini Ticketus deal if you like except that Easdale/Laxey are taking care to be better secured.

[forlanssister 3,114]

10 milllion left.

 

so still losing a million a month.

 

More than that when you factor in sigle match ticket sales, hospitality, cup games etc.

[BrahimHemdani 1]

but it is. because 45 quid from every season book will now not go to the club for next seasons squad.

 

That is certainly true; but it would appear that that is how we (and other clubs) have operated for years.

 

In an ideal world all of the next season's ST money would go to next season's expenditure but it seems that that is rarely if ever the case.

 

The fact that we are having to borrow against that 8 months through the current financial year is a major concern but it doesn't alter the basic facts.

[the gunslinger 3,366]

the real issue is here that the club last year was hemorrhaging money. this year it continues to hemorrhage money. the spivs are still benefiting from us being broke.

 

so who's actually going to change that.

[BrahimHemdani 1]

the real issue is here that the club last year was hemorrhaging money. this year it continues to hemorrhage money. the spivs are still benefiting from us being broke.

 

so who's actually going to change that.

 

Good point and a fair question.

[Bluedell 5,679]

The Annual Percentage Rate (APR) is indeed 30% i.e. that is the nominal rate taking account of the interest rate per compounding period multiplied by the number of such periods per year (two in this case). So if the exercise is repeated Laxey get £300,000.

 

However, if it was interest rather than a flat fee, it is arguable that the Annual Effective Rate (EFF) is actually 32.25%. This is the interest rate compounded yearly that achieves the same future value as the APR. The EFF is the rate that you actually earn for the period of time stated i.e. 6 months in this case. In other words if you charge 15% per 6 months on £1,000,000 you will get back £1,322,500.

 

Some had trouble understanding the simple concept of 30% and I thought it wouldn't add anything if I did the more complicated calculation.

 

 

and I was right