Are you hoping your bank is giving you the best deal it can but you’re not sure? You might worry if you rock the boat they might ask for more information than you want to give them. Or you can’t afford the time to find out. It often pays to engage the services of someone independent to take-on the banks. Then you can keep doing what you do best – running your business.
Don’t Assume You’ve Got A Good Deal
Assuming he had a good deal with his bank was costing this business owner a lot of money: Marcus owned a very successful business. But he was becoming frustrated with his existing banking arrangements. Looking to sort this out and with neither the time nor inclination to do it himself, he asked Full Focus to help.
- Total borrowings of $1,000,000
- Repayments of around $20,000 per month
- The bank had virtual wholesale security over his $5,000,000 worth of assets –
- Unlimited personal guarantee
- 1st mortgage security over his commercial property
- 18 individual pieces of machinery/equipment on the PPSR.
Over the years the bank had taken more and more security when it wasn’t required. As a result he had become increasingly exposed. This seemed like a real overkill for a $1,000,000 loan. Together, we put together what Marcus considered to be an ideal arrangement:
The Ideal Situation:
- Borrow an extra $700,000
- Residential property mortgage-free
- Repayment structured to fit with the cashflow requirements of his company
- No unnecessary securities held by the bank
- Limited personal guarantees
A Great Deal
In the end Marcus had offers from 4 different banks – all keen to meet his requirements. His existing bank did an about-turn and offered him a much better deal. They also met all the requirements listed above. In fact, the deal from his existing bank was so good it meant a saving of $8,000 per month in repayments. That’s $96,000 per year, every year – a massive reduction in outgoings! This was all handled with the minimum of fuss and little involvement from Marcus. This meant he could maintain focus on his business without distraction. He also had someone on his side who was willing to play hard ball with the banks. Still wondering whether your financial arrangements are helping or hindering? Don’t let lack of time or know-how get in the way of finding out. Not doing so could be costing you a lot of money.
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