Running a business can be hard work. Ask any business owner. Sure, there are good times when everything flows. But often, it’s a bit of a rollercoaster.
One of the most common stressors for business owners we come across is about money … or lack of it … inability to access it … or if you can, the crucifying interest that you must pay. But what are your options? Usually, unless your business is cash-rich, there aren’t many … if any.
So, you go to the usual financial institutions – banks, asset finance etc. Here too, there are problems. And if you’ve run into these problems, you’re not alone.
Issues for Business Owners
More and more we are finding our business owners are struggling with similar issues …
1. Inadequate Finance
They are facing difficulties trying to raise adequate finance. Banks are reluctant to spend money. They’re a bit nervous about how things are going to pan out this year and into the foreseeable future. They are risk averse. You’ll have to overcome many hurdles if you look for finance from traditional source
2. Legislation
Current legislation … Anti-Money Laundering (AML), Credit Contracts & Consumer Finance Act (CCCFA) and Financial Market Authority (FMA). These all make it difficult to navigate what was once a straightforward matter. We’ve gone through the hoops with our clients more than once. We know how time consuming, painful, and tedious these processes are.
3. Bank Relationships
There’s the problem of trying to develop a sustainable relationship with a good banker. When you think you’ve got the right person, they leave the bank. Or their role changes. Or they move to another location. And that’s assuming you’ve managed to find someone appropriate to talk to in the first place.
4. Possible Recession
To top it off, there’s the real worry of a potential looming recession. It’s not clear whether this is going to be a problem or not. Or if it is, whether it will affect your business or not. It seems the smart move would be to get ready for any and every eventuality.
Issues such as these make running a business twice as hard for the business owner. So how do we make it easier to combat these matters?
There are ways. Tried and tested by some our clients – with successful outcomes. These business owners were looking for ongoing access to capital. They also had no interest in struggling to overcome the issues noted above. So, how did they do this? We showed them how to become their own banker.
What is “Infinite Banking”?
We finance everything. Either by –
- Paying interest to someone else – bank, lender etc., or
- Giving up interest we could have earned otherwise. (When we pay cash, we lose the interest the money could have earned.)
So, what’s the essence of this concept? To recover the fees and interest you’d usually pay to a bank/financial institution.
How much interest have you paid to others during your lifetime?
The average person pays between 50 – 55 cents of every dollar they earn in tax and interest. The Infinite Banking system can provide a legal way to capture all or part of these outgoings. Why not stop paying interest to others and direct that interest to an entity you own and/or control? Doing this, you will have improved your ability to generate wealth.
The greatest positive of this process is the increase in liquidity or cashflow.
What’s crucial to understand is that we’re not talking about investing here. We are talking about financing. Financing is a process not a product. Financing involves both the creation and maintenance of a good pool of money and its use.
Real Life Examples from our Business Owner clients:
1. Commercial Property
Our client was keen to buy the commercial property they’d leased for several years. They approached their banker. Despite the business owner having banked there since high school, they turn him down flat! The banker recommended our client utilise “asset financing” to buy the property.
Our client was livid with his banker’s approach. He implemented a plan to become his own banker.
Within a short period of time, his family trust utilised separate funding to buy the property. Better still, they were able to give security to the family trust.
2. Replacement of Heavy Vehicles and Equipment:
This client owned and operated a transport and heavy equipment business. The business required much capital for the ongoing replacement of machinery. A truck unit for this man’s fleet costs $350,000 then there’s the trailer etc required.
Until we met this client, they utilised conventional asset finance. Companies such as UDC, BNZ Finance who charge fees on each transaction. They also take securities over the asset purchased. Interest rates and the term of the loan decided.
We demonstrated how to put in place his version of the Infinite Banking Concept. Through this, he was able to have his family trust provide the funding. The trust was able to hold the securities, not the bank.
3. Purchasing All or Part of the Business:
Our client had been in a jointly owned, very successful business. The co-shareholder decided to retire and set the date. Our client now wanted to wholly own the business.
We agreed to do an examination of our client’s affairs. This process identified several faulty areas in their existing legal and financial structures. But it also highlighted their ability to become their own banker.
Part of the process was to tender out our client’s entire banking needs to 5 different financial institutions/banks.
Existing bankers had both commented verbally that “funding would be no problem!”. But these banking arrangements all seemed to favour the bankers.
In the end our client’s family trust was able to take full security over the business, not the bank! Our client continues to use this concept for the ongoing replacement of equipment.
Is It For You?
Individuals who want to become their own banker must have financial conviction. They also need the ability to think clearly and see the process through into the future. The concept requires someone who is financially sound. Someone who is also willing and able to make a long-term financial play.
Think how different things would be if you could end the finance issues and become your own banker.
“There are only 2 reasons to be in business – fun and money. And when there’s no money, there’s no fun!”
If you think you’ve got what it takes and are keen to explore this concept further, give us a call on 09 489 1650 to have a chat. Or you can email us for further information.
Read our Free Special Report: Is This The Age Of The Consigliere?