“You Can Bank on Dave” first appeared on the is4profit small business blog.
So what happened in “Bank of Dave”, episode 2 last night?
Burnley Savings and Loans has been lending a LOT of money. The problem is that they still don’t have their savings licence and cannot take deposits.
But, on the bright side, at Dave’s doing to the local economy, he’s so far lent…
- £7,800 for a new shopfront for one business
- £75,000 for equipment for an outdoor pursuits business
- £1,000 to a local internet business
- £1,700 to a boat fitter
- £185 to a street busker so that he can invest in a new amplifier
And there are other local small businesses who are banking on Dave where other institutions will not lend. But the “Bank of Dave” is lending more than it has in savings, so Dave is using his own money to back his venture. And he’s lending around £25,000 a week!
One of Dave’s solicitors comes up with a plan linking savings to deposits as a workaround to the FSA guidelines, in effect, being an agency selecting who money goes to. The plan works and now Burnley Savings and Loans can take deposits.
Going to his local radio station, Dave puts the word out. When the day comes to open his doors to savers, right on the dot of 10 o’ clock, in marches a queue of local people who will get:
- 5% upfront on their deposits
- £25 cash for the first 10 customers
- A free ticket to the Burnley v West Ham match (Which was a 2-2 draw in case anyone’s interested)
The Bank of Dave takes over £60,000 in cash deposits in the first day it’s open to legally accept savings.
Dave’s next idea is mobile banking, but it’s more of an attempt at guerilla marketing than a serious mobile venture – He takes a 14 year old Mercedes minibus from his main business, and has it fitted out with a cash machine, a safe and a counter. The “battle bank” then takes to the roads and Dave Fishwick goes about some guerilla marketing. Taking advice from Burnley FC supporter and ex-Blair spin doctor, Alistair Campbell, Dave is told:
“Take your bank and park it as close as you can to the treasury”
Taking in Blackpool, a little town in Wales, where their last bank is about to shut, and finally London, the battle bank parks outside The Bank of England in Threadneedle Street, where he shouts about his savings account on a loud hailer (And gets some unwanted attention from the City of London Police)
“I want change in Britain, I want change in the financial system”
Dave gets more attention by speaking with local MP, David Stevenson, and has the matter raised in the House of Commons. Vince Cable, the Secretary of State for Business, also steps on-board the battle bank, this time in Scarborough, and agrees to get his team to speak with the FSA and “smooth things over”, promising to “take it to the next level” and agreeing that the banking system needs more competition.
6 Months to be Profitable
Remembering Dave’s golden rules in the first episode, he gives his venture six months to be profitable. After investing in gold (And smelting it down into a gold bar) and buying and renovating a small property to rent and finance the bank, Dave’s day of reckoning is upon him…
In just a few days, mainly due to the time he’s been unable to raise a savings licence, he’s taken £110,000 in deposits.
In less than 180 days, Burnley Savings and Loans has lent £365,000 to local people and businesses.
Adding all the overheads, profit and loss, the grand total comes to… *drum roll*
A profit of £9,511
Dave Fishwick is well chuffed – Comparing his tiny tiny bank’s profit to the losses of RBS and other big high street banks over the last year, the gulf between what they’ve lost and what he’s made amounts to billions of pounds.
True to his word, the Burnley businessman sets out to redistribute the profits and goes off into town to hand cheques for thousands of pounds to local charity shops. They’re all genuinely bowled over with his generosity of £2,000 each, proof that a small-scale, low-overhead bank that doesn’t hand out big bonuses, really can make a difference to people’s lives.
Let’s see where Dave takes this next week! You can Bank on Dave!
And if you can’t wait to see the next episode in the series then you can always buy Dave’s book – Bank of Dave: How I Took On the Banks: The Story of One Man’s Heroic Attempt to Take On the Banks