Myth-busting – Electrical Safety installations Act 202011:19 AM, 3rd August 2020
About 2 weeks ago 82
In my previous commercial finance blog I spoke about the cost of finance post credit crunch. This time my question is; would you rather go bust than deal with greedy bankers?
It seems like a bit of a daft question doesn’t it?
I think we all have to accept that we are where we are in the economic cycle. Lots of things have increased in price, petrol being a prime example, but we haven’t all sold our cars have we?
I was speaking to a property developer only last week about his development finance requirements. He explained his deal to me and he stood to make around £400,000 before allowing for financing costs. Previously his bank had provided an overdraft facility at a rate of 2% over base against the security of an industrial estate he owned and rented out (no mortgages). However, they are no longer interested in his business which he was not impressed with.
He had shopped around for finance before talking to me and had actually got an offer letter from one lender but was complaining about the extortionate finance charges being quoted by his “greedy bankers” (they were not his exact words). His point, which he made several times during our conversation, was that the charges would wipe out nearly half of his profits.
I wanted to see if I could help so I took down the key details and promised him that I would call him back after speaking to a few of my contacts. I did that but due to his circumstances, which I will not go into, they confirmed that the deal he had was the best he was likely to get.
I called him back as promised and gave him the best news that I possibly could under the circumstances; that the offer he had received was a good one in todays market. He wasn’t a happy man! Despite the fact that I had spent three hours researching this for him completely unpaid – I didn’t even get a thank you 🙁 All he was interested in was telling me how awful life is. Some people hey?
I was very tempted to put it in my diary to give him a call in about six months time to see if he progresses the deal. I suspect he will lose it as a result of prevarication. I’m not sure I want to expose myself to his negativity again though. Tempting as it would be to tell him what a Muppet he is if he does end up missing out on £200,000 of profits, is it really worth me rubbing him up the wrong way even more?
This is part three of my commercial finance blog
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