In response to the Treasurer’s Pitch on approving a Loan facility of ¥1 Billion

Time and Money

With all due respect, TAC has proven poor at predicting and preparing for risk. Historically, we have tended to ignore worse case scenarios, in favor of optimistic predictions, and have paid a dear price.

The worst case scenario in this case is we draw down the entire ¥1 Billion (with the best of intentions, I am sure) increasing the debt service by ¥250,000,000 / year for the following four years. This amount, added to our current debt, even in a very favorable economic predictions is likely unmanageable. In a moderately less optimistic future vision servicing this debt would clearly be impossible and could lead to The Clubs ruin.


While this issue is not addressed in the Treasurer’s report, reading between the lines, it seems the answer may be that we do not intend to draw down the loan facility, so this this will not happen. The question this raises, why create a loan facility in the first place, tempting current and future leaders, if we know it may lead to our ruin if it is used?

3 Replies to “In response to the Treasurer’s Pitch on approving a Loan facility of ¥1 Billion”

  1. (1) Check basics:
    Does TAC have a standard set of financial plans ,such as annual operating plan, and 3 years long term operating plan, P&L, BS, and Cashflow?
    Does TAC do monthly plan vs actual control?
    (2) Counter Outbreak Scenario:
    Min cash burn per month to survive.
    Min cash burn per month to provide TAC standard service broken down by each line of service.
    Next 90 days,180 days operating plan including Worst, Target, Best cases.
    (3) Capital Sourcing:
    Min cash case in the (2), should explain what line of service at what service level are assumed to run with details of cost and expense side including HR cost and headcount.
    When in trouble, go back to basics and common sense. This exercise will tell us what we need.

  2. Unfortunately the business model works under very specific conditions, much narrower than the realities we have to deal with. It’s disappointing that we have, yet again, the same issues, the same proposals, the same obfuscation/adverse reaction from the Board/Management, & eventually the same eventual solutions: borrow more money, raise fees & costs to members, cross our fingers & hope it’s enough. If we make it through, see you all
    again in 7-8 years. Or, we change the model.

  3. Loan or no loan, what I feel is still missing is what has the club already done and shared with the members that they have done to work through what we currently have as concern of financial difficulties. The actual loan means nothing unless you take a draw against the credit requested. (Safety net is always good to have) however what we haven’t seen is the plan of what we have already done to reduce all cost possible not to bring unnecessary cost and increases to its current members. Borrowing money and reducing access makes no sense again unless you plan to show increase of access. No need to keep the club open and pay unnecessary costs if members do not have the ability to use the club at capacity within means. Otherwise…mothball it and hold all cost to minimum as possible.

Leave a Reply

Your email address will not be published. Required fields are marked *