Australian businessman Dick Smith has alerted Australian business owners to the possibility of business loan interest rates returning to 27% in a newly released 60-page manifesto on housing affordability.
In the document, called “Dick Smith: A Fair Go”, founder of once-dominant tech retailer Dick Smith Electronics also discussed how the credit given in housing loans since 1996 has continued to increase in a linear fashion, while business loan amounts have plateaued.
“When I started Dick Smith Electronics, my partner and I bought a house for $32,000, and because it was such a reasonable price we were able to put money into expanding the business,” Smith tells SmartCompany.
“If a business owner was doing that today, they’d have to put all their money into buying a house.”
“People think there are all these advantages to being a millionaire in the housing market, but the cost is that you’re not starting a productive business.”
When starting Dick Smith Electronics, Smith recalls banks wouldn’t loan him any money “because I didn’t have any”, saying he started with just $610 dollars and borrowed some money from a credit company.
Putting all the money he made back then into the business allowed him to continue to expand and grow Dick Smith Electronics into the Australian retail powerhouse it became. Smith sold the his final stake in the business to Woolworths in 1982 for $25 million. Read more
Dominic Powell – Smart Company – 11 Aug 2017