Steve Varsano, founder of The Jet Business live on Bloomberg TV April 2013

Welcome back. You're watching The Pulse. We're live from Blue Books London headquarters. I'm Guy Johnson and I'm Francine Lacqua. Now, let's get a perspective on the ECB and BOE's upcoming policy decisions from a corporate executive.

Stephen Varsano is founder and president of the Jet Business. He says the central banks don't have a huge impact on companies; it's private banks which make a big difference. He's here to tell us what is going on.

"Effectively what your clients see and what your business sees is not the base rate; it's the bank rate with a margin on it. And I guess that's what we've got to try and fix, because the central bank can cut rates all it's like, but until it feeds through... that's right. I mean, a 0.5 doesn't mean anything if the borrowing rate to the end user is going to be 400 basis points over that.

And you know, the other problem is: who are they lending to? The banks don't want to lend to the people who want to borrow, meaning the emerging market areas. Would you ask from the Bank of England today? Does it affect confidence?

I'm more interested in borrowing money and therefore being a little bit more confident about the future. I mean, I think if you can... let's say for RBS, let's say it's owned basically by the government. You know you can force them to say go out and loan money for 150 basis points over, you know, the LIBOR or the lending rate and just actually lower the loan to value, so actually your risk is not really there. Because if you're going to only loan 50 of the value of an asset, just give money out and start spurring the economy by lending more money and getting more money out there.

They can do that if they want to, but the banks are so risk averse that they're holding on to the money and they're not spending the money that the Bank of England wants to lend them.

I'd hate to see the front page when it comes down to the fact that the Bank of England is helping people buy business jets, but that's a whole different argument.

But this is, I guess, why the Bank of England and other central banks are moving. The point of attack funding for lending is now the big new scheme. It's about lowering the costs for the banks; it's trying to encourage the banks to lend more. And I guess, from what you're saying, that is what we need to see put on steroids.

Yes, because the banks themselves at the retail level, you know, they're saying we'll lend you money but we want you to hold a third of the money we're going to lend you on deposit, whether through securities or through property or through cash. They're saying that you basically... we want you to be a private client.

You know, they get to the point, you know, we… you have to have, you know, one leg and one arm and wear a blue shirt. I mean, the restrictions are pretty heavy; and so it actually, you know, deflects from the incentive to borrow.

Does it affect your business? Are you concerned about the fact that visibility is very difficult? What do the clients tell you?

Actually, it doesn't affect our business that much because most of the clients borrow money after they buy the aircraft. They have a better negotiating position with the banks when they already own the asset.

If they're trying to borrow the money in order to buy the asset, the bank knows that they have more leverage because they need to have more restrictions; they use it as collateral.

Well, when you buy the aircraft, you own it 100% with no debt on it. You go to the bank and now you're trying to borrow against it, so you're not rushed to borrow the money; it's not as pressed, so you have more negotiation. You can choose a little bit more and you can say, what do I pay over base rates? I mean, usually, depending on your credit, it's going to go anywhere from 300 basis points to maybe 500 basis points. So I'm paying 5.5 for money, that's correct.

Okay, and the amortization usually is over seven to ten years. So at what point does it hit your fundamentals, though? Is there a point where actually you say the situation in the UK or in the world economy is so uncertain that people will stop buying? I mean, do they buy the jets cash at first?

Yes, most of the people do buy in cash on the top end of the market. The smaller airplanes, the smaller jets, those people borrow more of the money. The problem is the banks don't want to loan to the one or two or three million dollar people. They want to go into the 30, 40, 50 million dollar people because it takes the same amount of work, the same amount of legal work and processing for one as the other.

So why do a two million dollar loan when you could do a 40 million dollar loan? And all airplanes are priced in dollars, so this is why I keep referring to dollars. Am I getting... am I getting a better deal in America, or am I getting a better deal here? Am I getting a better deal in Japan? Am I kind of... where should I be?

Is there smart? You can move a plane around the world; this is a geographical footloose and fancy free asset. Where am I getting the best financing?

I mean, most of the banks, the global banks, yeah, are lending no matter; they're competitive no matter where they are. There's the, you know, the Deutsche Bank, there's the Bank of America, there's Barclays. These guys are all very competitive. But if you are coming... it depends on where you're coming from. If you're from Ukraine or you're from Nigeria or you know you're in these kind of emerging markets, it's hard to borrow money. I mean, you can borrow if you're going to be paying even more than 500 over LIBOR.

All right, Stephen, thanks so much for that. Stephen Varsano, president and founder of the Jet Business. Many questions still to be answered in my head. Anyway, let's move on; time to today's company news now.