Why do you run your farm ? Is it to make a profit, because you enjoy it, because your family passed it down, or because you see a need for what you deliver to society?
You can rest assured that the bank moneylender from whom you borrowed, lends money purely to earn a profit despite its advertising. The fact that there is a great need for loans makes it easier for them. The fact that the market is substantially controlled by just four banks makes it easier still for those banks to overcharge and under-service those borrowers.
Then the fact that your elected representatives in Federal Parliament removed most regulations that protected borrowers, makes it easier still for them. The final boost that allows them to head this year for a collective $33 BILLION profit is that your state and federal parliamentarians sold off the government owned banks to remove the honest customer-focussed competition.
A profit of $33 billion means that the banks charged customers $33 billion more than what it cost them to deliver their banking services. It also means that your farm is being drained of much more income by the banks, than is necessary for them to make reasonable profits.
Defensive strategies to borrow for profit
No matter what reason drives you to run your farm , you can see that there is scope for you to improve the profit it delivers by borrowing better. That requires two strategies that GBAC (Greg Bloomfield Agribusiness Consultancy) has developed to assist you.
Make Banks compete
First you can make the banks compete for your business. There is only one factor that drives banks to lower their prices. That is competition from other banks. It does not happen naturally any more than your farm or business runs naturally, without effort on your part, though many consumers may act as though it does. Way back when banks were first deregulated in 1987, I invented what we called then a Moneygram to get banks competing for the business. Borrowers then bargained down their interest rates by up to 6%. Because of confusion with a global service run for transferring money overseas, we renamed our service “Borrow better”. That name better explains what it enables borrowers to do.
Low cost big impact
Borrow Better is very cheap and it begins your borrowing experience with you in control. You offer your loan business to many banks. Banks knowing that they can earn extremely good money from it, offer you what you want. You can then bargain down the interest rate, the bank charges and the loan terms. That puts you in a far better position than using a broker to whom the bank pays about $7,000 for delivering your business to the bank on a plate. Who do you think eventually covers that brokerage? You! To whom do you think the broker’s loyalty lies when it is the bank that actually pays the money to them? The bank!
Parliament throws borrowers to the moneylenders like Romans threw Christians to the lions.
You can join the bank customer Voterlobby we have formed to encourage your elected representatives to once again insist that banks be fair to borrowers and to accomplish that, establish government owned banks with their prime purpose being to serve the voting community, with profitability an important but secondary consideration.
Fair Go for Borrowers
GBAC exists to inject a measure of fairness into the farm moneylending industry. Borrowers deserve that. For some 50 years, GBAC has been helping borrowers big and small all over Australia, receive a better, more profitable and suitable loan facilities. We have run our own farms and so know what it is like to be on the other end of a long term loan facility. We also know what it is like to run a farm in the fairly difficult environment that Australia provides.
Those who engage us permanently to mentor them in financial matters knows that there are many other ways to boost farm profits by minimising your debt to cut the interest bill. Loan repayments including interest are often the biggest expense on a farm.
Qualifications and experience make a formidable combination
In running our own farms we found that having mentor consultants available with specialist knowledge was a substantial benefit. We could not know everything about the law, animal health, weeds, tax or debt management, but we sought help from specialists. By combining the qualifications of a Chartered Accountant/CPA, Chartered company Secretary/Administrator, and Fellow of the Institute of Company Directors with the experience of running our Chartered Accountancy Practice, a merino wool producing sheep property in the middle of NSW and a beef cattle property in the Southern Tablelands of NSW, and engagement with parliaments throughout Australia on behalf of voters, we have developed a keen insight into borrowing better to take a bit of the profit from the banks and put it into our clients’ pockets.
Happy to chat any time about how it works for farmers no matter where in Australia they are located.