Escaping from the never ending repayment treadmill

Following on what I wrote last week, it is not easy to escape from the carefully laid debt trap of some major  Australian Banking Billionaires.

Farms

On many farms things are going okay. Wool is holding up. Cattle prices are easing as stock bred when the last drought broke start producing saleable progeny. There is a big demand for grain because of Ukraine. The threat of new transmission lines across farms devaluing the farm is a real one that requires serious attention by farm borrowers. The excellent rental payments that might boost farm profits need to be considered in the light of the loss of long-term capital value. In that respect there is a question of whether solar power really needs long distance transmission lines or whether it would be more cost effective to put solar panels on all roof tops and feed the power into local storage batteries in each LGA.

Businesses

For businesses the same system of LGA batteries with solar on all rooves might also be cheap, effective and environmentally friendly. It probably needs investigation. No-one seems to know whether inflation is going to destroy profits through rising costs or recession is going to destroy them through falling sales. Being prepared  to move either way is how most farmers and business operators cope.

Cut costs

First move is to cut out every bit of spending that is not essential. Cut hard and cut early. That will usually ease the pain considerably and stop the default notices. It also fixes your credit record in that you will then hopefully be making loan repayments on time. Suppliers would prefer you to keep spending for their own safety, but the first step is to save yourself. If you go bankrupt that will not help your suppliers.

Re-finance

Next move is to look at where else you can borrow the same amount as you owe, on the same security, but with better terms and at a lower interest rate. The very competitive nature of the big banks works for you this time. They are all anxious to take one an other’s clients as their own. Don’t think that because your own bank is unhappy with you that other banks will not want you. They will always want you if you can service their loan. So this time when re-financing let GBAC give you a hand to tailor your loan terms to your operation and help you manage it  so that it works for both you and the new bank. Don’t be tempted to borrow any more than you already owe unless there is a very good reason. Swapping free credit from suppliers for interest-bearing debt with the bank is not clever but re-financiers may try to persuade you that way, for they can set a debt trap too. A better move with creditors is to talk to them and schedule payments. GBAC can help you do that.

Borrow Better

Quickest, cheapest and easiest way to go is GBAC’s Borrow Better service. It puts you in touch with  a number of bankers who are likely to want your loan business. They want it because moneylenders earn their income by lending money. They will privately compete for it whereas publicly they mostly offer much the same product. Borrow Better is not a Big Bank Broker that gets paid $7,000 or so for leading you to the bank. Borrow Better is an independent service that normally would costs you $250 and the bank nothing. When you come to a bank via Borrow Better the bank saves that $7,000 and so can give you a cheaper loan, if you make it do so. The current cost of living crisis caused in part by Russia’s invasion of Ukraine on top of Covid has prompted GBAC to waive even the $250 fee for the first 20 borrowers to use the service this August 2023. The reason you cut expenses to get your current loan payments up to date at the same time as using Borrow Better is that new lenders will be keen on your business if you are making the payments you said you would, when you said you would, to your current lender. Impressions are very important in the “Borrowing Game”