Bank Loans

If you are considering going direct to a bank for a loan, you would be doing yourself a dis-service. The employees can and will only tell you about their own products. This could cost you a fortune in unnecessary interest.

Regarding bank accounts etc, just shop around as there is so much variation between each bank. I am partial to ANZ due to their excellent online banking. My account does not cost me any fees either as I do all my banking online.

Robert Bou-Hamdan
Mortgage Adviser

http://www.mortgagepackaging.com.au

Investor Links

I don’t think banks are as bad as everyone seems to think these days. I think they are often misunderstood but this should turn around in the near future.

As many people here know, I have been interviewing for various positions in the finance industry in recent weeks including banks. I was impressed to find out that one particular bank was hiring a whole lot of people to be trained as branch managers with the predominant skill requirements being customer service and empathetic staff management. This should see some excellent changes at the branch level and make managers more approachable.

I was also informed other banks were doing similar things.

Robert Bou-Hamdan
Mortgage Adviser

http://www.mortgagepackaging.com.au

Investor Links

Dazzling

You wouldn’t happen to a mate of Salib’s would you.

I assure you that the rate of interest you get charged is no different going through a mortgage broker or going directto the Bank.

Unless of course you want to give us all some actual evidence to proove me wrong.

Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.

I just found this site by accident and decided to join up and post this reply.
In my view banks are dinosaurs and living in the dinosaur age.
I was bankrupt (just ending)18 months ago and down to 10cents.I raked up $800.00 and started a company and then raked up $3000.00 to buy stock with.I have grown that company every quarter since.Turnover in the first 2 months of this year alone was $218,000.00.
At present I have no debt and cash in the bank.Yet do you think I can get finance?

I wanted to invoice factor but the dinosaurs want 36%p.a AND have a speread of debtors to minimise risk.The hide of them!!!36% (which is what it is.Calling them a fee instead of interest changes nothing) and still want no risk.
The banks want guarantees yet call it an “unsecured loan”and want 11% for it.EXCUSE me dinosaurs,but how is an unsecured loan UNSECURED if it is guaranteed and if it is guaranteed then how the hell do you get off charging unsecured rates.
Companies are in trouble because of the internet.I pay no rents,employ no staff,have no debt.I can sell what the others sell for a lot lot less.Hence turnover is increasing yet the dinosaurs cannot see that I am worthy of a loan or an overdraft.
What a joke!!!

gf

Originally posted by upandcoming:

I was bankrupt (just ending)18 months ago

What is to stop you going bankrupt again? The bank might be concerned that if you do, they lose everything. I am amazed that they made any offer at all for unsecured credit. This type of credit is usually the hardest to get (excluding credit cards).

Yes I know you can get finance. It comes down to how much you are willing to pay and its purpose whether you take it or not.

.

They would be taking on substantial risk. The interest rate is reflective of the risk and your credit history.

I disagree. The internet is an invaluable tool for many companies. I believe companies that get into trouble do so mainly because of inadequate planning. Regarding your internet business, these are a dime a dozen and can disappear just as quick as they start up.

I pay cash for everything I want.I pay cash for my stock.
I could grow it a lot quicker with finance but in 12 months I will move $250,000 worth of stock a month at 25%.I just cannot understand the attitude of the banks or other finance people.
But i wont budge either.I did it hard and now as far as I am concerned I may as well go it alone.

gf

You told us you were already offered 36% finance. That means you can get it if you want to pay that much. Regarding your refusal to do a business plan, there is a very old saying… “Business do not plan to fail, they fail to plan!?

Seeing you need them to help you and they do not need you, I think you should be a little flexible in meeting their requests to approve your application.

I will survive and I guarantee that in a few years the ones the banks are helping,ie traditional businesses will go under.
I just bought a container of chairs that sell for $1200 in the stores and sold the lot for $250 each and made a good margin.
In 6 months I will start auctions in my home town.The mainstream businesses cannot compete and although I am not silly enouhgh to think i will run them out of business I will beat I hurt them.let the banks lend to them,but they may not be in business in a couple of years so they may not be in a position to borrow.
I can sell musical instruments at a quarter of retail.I have sold more musical instruments in a year than most music shops sell in 12 months and they are established.I can split containers because I have a good network OS and I dont have many warranty issues.
My business is based on good fundamentals but noonewill look at it because of their policy.So I need to turn cash quick to survive.So that is what I do and the ultimate loser is the competitor who employs staff and pays rent.
I dont need the banks.I would grow faster with help but I will grow just the same.
And while I am growing I will more than likely help some other business to the wall .

gf

You seem to offer a lot of guarantees. How can you be certain of competitors going under? What is to stop them from commencing a new division to compete with your business just like the major supermarkets did with online shopping?

They certainly have the buying power, contacts and skill to do so very quickly should they feel threatened. I am certain they have business plans that identify any threat from online vendors and their tactics to stem this threat. That is where business plans are invaluable

Because I don’t want to.

You just stated again that you were offered “it” if you complied with their demands. I don’t know if you know this, but everyone who gets a loan regardless of their situation must comply with the demands of the lender to obtain approval. Why shouldn’t you?

I consider this a weakness which a business plan would have identified. I would prefer paying a little more for something to receive a warranty backed by an established organisation.

Gerry harvey wants the Chinese to float the RMB.WHY????He made a billion dollars with a fixed RMB.He wants it because there are people like me and they are worried.Traditional wholesalers in sydney are falling over every week.retailers are much better.Internet sales are up.Does he think a floated RMB will matter?

All his stores are franchises.It is not easy for them to go on the internet because they are not one store or business.

So you keep thinking you are right and I will keep doing what I am doing.I doubt i will ever borrow money and you can keep lending it to the drones that comply with your rules.

gf

Ok gf, you seem to be a little all over the place. I will try and clarify one last time…

I don’t know why big companies don’t take you on right now. Maybe they do not consider you as any real threat. As for me starting up, I was merely trying to point out that ‘ANYONE’ could do what you are doing. It is not a specialised field and it is certainly one that I am not interested in.

That is your choice as to not changing your plan. If you want the money though, you will need to change it.

Yes mate. I don’t understand anything. You said you had no warranty issues. If you were suggesting that your goods are of better quality than all other retail stores and respected brands, then I think you are kidding yourself. I think you missed my point that price is not always the most important factor.

If you think this is arguing, then I feel sorry for you. I thought we were discussing the reasons why the banks were being tough on you and other matters relating to your business.

To be honest, I don’t think Mr Harvey would give you a second thought. He is one of the smartest and most respected business persons I know. He is an extremely intelligent man. As for floating the dollar, it would make a huge difference in costs of materials and stock and their competitiveness. I think you should look at the impact of this in your ‘business plan’.

As for ease of going onto the internet, it would take them about 2 days with a good team. Registering an offshoot business and building a website is all that is required.

I don’t think there is any right or wrong here. There are just differences of opinion. Also, I do not lend money to anyone. I am not a bank or other lender. I don’t know why you are getting so upset.

As for why I think you don’t have a business plan, I think the following quote answers that…

“Well I cannot get finance.Maybe because I am of the opinion that my figures speak for themselves.I certainly will not draw up a business plan .”

Regarding staff, it is a common business practice to put staff on when the business outgrows you. No-one can grow without limit unless they put on staff to assist.

Regarding staff requiring an ABN, I think you will find yourself in breach of various taxation laws. For example, a secretary that only works for you cannot be classified as a sub-contractor. You will be required by law to pay wages, holiday pay, sick pay, superannuation, etc… That is, unless you want to take the chance of operating outside the law.

I also never assumed you needed a ‘store’ for your goods. What I did imply was that you will need to pay storage for your goods at some point and unless your home is massive, you will need to pay rent for an office or ‘store’ some time in the future.

The information I have been providing you was an attempt to try and help you. I have a lot of experience with small businesses and I also have some importing experience. Also, I am very experienced with finance.

The only way you can get away with not paying storage or rent is if you only order a container after you have received the orders to sell the stock. I don’t see many customers waiting this long for delivery. You will also need to have the container emptied and distributed within a few days or there are costs of leaving the stock in storage.

I wish you all the best with your business and hope you find the finance you seek soon so you can grow at a much faster rate.

Good luck.

Robert Bou-Hamdan
Mortgage Adviser

http://www.mortgagepackaging.com.au

Investor Links