Hoping your bank is giving you the best deal it can but not really sure? Maybe you’re worried if you rock the boat they might ask for more information than you want to give them. Or perhaps you simply can’t afford the time to find out.
More often than not, it pays to engage the services of someone independent to take-on the banks while you keep doing what you do best – running your business.
Assuming he had a good deal with his bank was costing this business owner a lot of money:
As the owner of a very successful business, he’d become increasingly frustrated with his existing banking arrangements. Looking to sort this out and with neither the time nor inclination to do it himself, he asked for help from an independent consultant.
- Total borrowings of $1,000,000
- Repayments of around $20,000 per month
- His banker 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.
A real overkill for a $1,000,000 loan. Over the years the bank had taken more and more security when it wasn’t required. As a result he had become increasingly exposed.
Together with his independent consultant, they put together what he considered to be an ideal arrangement:
- Borrow an additional $700,000
- Residential property mortgage-free
- Repayment structured to fit with the cashflow requirements of his company
- No unnecessary securities held by the bank
- A personal guarantee that was limited
Could his consultant find a deal that matched all these requirements.
Not only were they able to bring offers from 4 different banks – all keen to meet his requirements … his existing bank did an about-turn and offered him a significantly better deal as well as meeting all the requirements listed above.
In fact, the deal from his existing banker was so good it meant a saving of $8,000 per month in repayments – not just one month, every month. That’s $96,000 per year, every year – a massive reduction in outgoings!
Because he’d had the good sense to call in outside help, it was all handled with the minimum of fuss and little nvolvement from him – meaning 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.
If you’re 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.
So who’s got the best deal – you or your bank?