Why pay sky high overdraft rates?
Most banks are more than happy to give you lending for your
business, and why shouldn't they, it makes them mountains of
interest and charges. They also get to have title to your
property, so they are in effect offering secured lending, at
unsecured rates.
Many lenders now offer flexible
type mortgages, where you can pay lump sums off your balance,
write cheques from a cheque book, against your mortgage up to a
pre agreed amount, and best of all, at mortgage rates, NOT
overdraft rates. So what does this mean? let's look:-
Lets say you have a cash flow
problem that will be resolved when a big customer pays you in a
month or two, how would this work?.
The
Bank
The bank will invite you in, ask you for a business plan (this
will cost you time or money or both), the bank will then humble
you, by telling you your business is risky and that they feel
the need for some form of security (usually your home). they
will then arrange the paperwork, charge you a hefty sum for the
meeting, a hefty sum for the facility, which they will attach to
your account for longer than you need it, and a monthly
management fee thrown in. When the big customer pays up, you
deposit the cheque and bring your account back into the position
it was before the overdraft was added. The bank however will
continue to charge you for the facility until the end of the
agreed term. All in all a rather humbling experience
Flexible Mortgage
You sit down, work out how much you need, check how much is
outstanding on your mortgage, and write a cheque from the
chequebook, and deposit it into your account. No calls, now
begging, no paperwork (other than writing a cheque). Your
mortgage balance will be adjusted and you will begin to pay
interest AT MORTGAGE RATES on the new higher amount. When the
big customer pays you, you write a cheque, and bring your
account back into the position it was before the extra amount
was added. You will now pay interest on the amount outstanding,
and as interest is normally calculated on a daily basis you will
never pay interest for longer than you should.
An added benefit that many
business people have told us, is that they are free to move
banks, and often this gives them the power, not the bank, to
decide how their business account is run.
To enquire about this service
please complete our online enquiry and we will contact you by
whatever method you request, or telephone us on the number
below, and remember we are a fee Free consultant.
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