Fair Go for All Aussie

Fair Go for Aussies

It surprises me that 40 years after we invented our Votergrams and Moneygrams, some Australians are still having trouble dealing with their banks and governments.

The words I learned in my youth ring true, “If we always do what we’ve always done, we’ll always get what we’ve always got.”

There are very specific new strategies required to obtain good results from both banks and governments. The world has changed and the old ways no longer work as they did.

The naïve belief that both the banks and the government are working to serve the people should surely be dispelled in a few words.

Borrowing & the Bank

Banks are making multi-billion dollar profits that enable them to pay multi-million dollar salaries to executives. If you were able to earn that much money would you want to stop in order to give customers a fair go? Not likely, when the customers just keep on coming regardless!!

Will brokers, paid huge commission of about .008% ($8,000 on $1m) on each loan they deliver to the bank, really look after your interests ahead of that of the bank that pays them? Not Likely!!

Bankers and borrowers sit on opposite sides of the table. One wants the best deal for the bank. The other wants the best deal for the borrower. As in arm wrestling, the one with the strength wins.

Australians who really want to borrow better, google “Borrow Better”. That brings them to BorrowBetter.au to borrow better as many have done since de-regulation in 1987. Then we can help them with proven borrowing and negotiation strategies so that they get an extra special deal as the bank saves a mountain of brokerage.

Sure it takes a bit more effort, but doesn’t everything that’s worthwhile? It is better than learning the hard way that “variable” means the interest rate can vary up as easily as down, at the will of the moneylender. ferris wheel

Government and Society

With 27million people, 17 million voters, how could any government please everyone. It can’t!! The government does what active voters persuade, bully or bribe it to do. The first step for Aussies is to take off their “Community” hats and replace them with their “Voters” hats. The parliament that they elect as voters is their pathway to good government. Those Votergrams have proved to be the very best vehicle for using that pathway to guide government departments, contractors and bodies.

Votergrams embrace not only the ability to reach each and every MP, but also a wide range of very successful strategies that have been progressively developed over those almost 40 years, many with the active assistance of Members of Parliament and parliamentary staff.

Votergrams are all about working with parliamentarians through polite, persistent political persuasion in the privacy of parliament.

FairGO

All Australians are entitled to a fair go and we have found that we can generally make that happen for them.

Greg Bloomfield

Profit-sharing with the bank!

Check it out

How much are you profit-sharing with your bank or other moneylenders?

A quick look at the Profit and Loss Statement in your tax return this year will tell you. If you don’t want to wait that long, look at your 2023 tax return

Go to the Profit and Loss Statement and highlight the Net Profit at or near the bottom

Then go up the column to the line for Interest or Interest paid and highlight it.

Compare the two figures.

If Net Profit is four or more times the amount shown as “Interest” then you are probably going okay. If Net Profit is 10 times Interest, or more you are certainly not working for the bank.

If Net Profit is about the same amount as Interest paid then you are sharing your profit equally with the bank or other moneylender. That means that if you are working a 12 hour day on your farm or in your business, you are working 6 of those hours for the bank.

If interest is 3 times your Net Profit there is a more serious problem. That means you are working 9 hours a day for the bank.

If interest is 10 times your Net Profit, you are working about 10 hours a day for the bank. Time to change that.

It’s good to know

It is good to know who is making the most out of your working day, because sometimes we work long and hard to make a mountain of money for others but very little for ourselves.

The solution is usually to plan your finances to increase the profit you earn and decrease the interest paid to the bank. A budget that increases profit and decreases debt is the best solution.

Plan your profit in advance

I had always known that, but when I first bought then expanded my merino sheep property at Tullamore and then added my beef cattle property at Braidwood, the truth came home to me in my own financial statements as well as those of my clients all over Australia. It is one thing to consult others but a quite different thing to do it yourself.

Doing my own budgets and changing the farm financial structure so that we were making most of the profit took a bit of time but was very rewarding. When we farm, our focus tends to be mainly on crops, livestock, vehicles, fences and feed. Finances do not enter the daily routine except when the bills come in and we look for funds to pay them.

As a friend once comment to a group discussion, “If you fail to plan, you plan to fail.” Financial Farming is what delivers the financial rewards for those long hard days of work

Greg Bloomfield, GBAC

Farmers Friend or Foe

Who is the Aussie farmer’ friend?

The good farm debt consultants, of course!

Don’t be misled into cash-draining debt by some foe working for the bank or government. Good debt is debt to buy an appreciating asset like more land. Bad debt is debt to cover operating costs or farm succession. There’s more than one way to finance farm operations and succession.

On the Australian Bankers Association website is a bank-friendly warning from ASIC, “AFCA and consumer groups continue to raise concerns with ASIC about the conduct of debt-management firms” –

Who is on the farmer’s side? Not the Bankers’ Association! Nor ASIC! Both are trying to frighten farmers from getting good advice about farm loans. Farmers can wonder whether ABA and ASIC know anything about livestock or crops and imagine that “fencing” is a sport played with swords.

Banks made to refund billions. A farmer who did this would be in gaol!

In March 2023 banks were ordered to or offered to refund $4.7 billion dollars they had wrongly taken from customers. One farm debt consultant says that could be the tip of the iceberg. “ASIC protects dishonest banks instead of gaoling their directors who have ruined farmers’ lives. How can banks steal $4.7 billion from customers and yet the directors who direct bank operations have not even been prosecuted for theft or fraud, let alone gaoled?”

Negotiating with bankers and marking calves have a bit in common

As a 4^th generation farmer, Greg Bloomfield was fortunate enough to qualify as a Chartered Accountant, CPA, Chartered Company Secretary and Fellow of the Institute of Directors (AIDC) by his early 20’s.But like his grandfather and great-grandfather what he really enjoys is running sheep and cattle. When banks were de-regulated in 1987 and given free- rein to rob customers, he decided to focus his Australia-wide professional practice on helping farmers fight back. He did that while running sheep at Tullamore and cattle at Braidwood. The difference between bankers and livestock are that the stock are pretty honest, but both lose a bit in the process. He still does that and not one farmer anywhere has had anything but praise for his determination in getting them a fair debt write-off. The “about” page on his website displays the glowing praise of his past clients.

Greg Bloomfield and GBAC are on the farmer’s side. For years he headed the largest branch in NSW Farmers and toured the state visiting farms to get huge debt write-offs and addressing local groups. While he says “I’d rather be working cattle or fixing fences than battling banks”, the internet has meant that the time he spent traveling from farm can now be spent in earning farmers more money from debt negotiations with their bank, than many have earned in years of farming.

Borrowers beware and ensure you know what the repayments will be.

It was Greg’s wise neighbour, Frank, at Tullamore who cut to the essence of farm loans by saying “Borrowing’s the easy bit! It’s the paying it back that’s hard.” That is a truth that can be forgotten as we scramble to find someone to lend us the money we need.
The services that farm debt consultants like Greg provide are unsuitable and uncomfortable for dishonest and predatory banks and include:
making banks write off debt caused by predatory dishonest lending practices,
making banks share the suffering for setting debt-traps from which farmers cannot escape,
persuading the banks to give farmers a repayment holiday when the season or prices go bad
helping farmers increase their profits with cheaper more suitable loans in the first place
working tirelessly to help farmers clear debts, recover title deeds, farm debt free and enjoy the farm lifestyle.

The one who pays the piper, always calls the tune.

Banks have the opposite priority to farm borrowers. What makes the banks rich, makes the farmers poor – interest and charges. When the farmer cannot pay interest the bank increases the interest rate. When the farmer can’t make a loan repayment the bank gives an overdraft at a higher rate to cover the payment. The loan grows and grows like a cut-and-come-again weed crop. This can continue until the farmer is sold up when it reaches 80% or 90% of the farm’s market value.

Government too has the opposite priority to farm borrowers. It seeks an ever-expanding economy where money moves around and around to end up in the government coffers through taxes each time it moves. Farmers borrow then spend the money with the rural store, which pays the wholesalers who pay the manufacturers who pay their staff who pay the supermarket etc, etc. Farmers become the pipe through which the stock and crop sale money flows out to the great unknown.

If the government or banks are paying the people advising you, recognise that there is a line they do not cross. Because the person doing the paying determine what advice is given.

Don’t fight bank alone because they do it every day

What Greg and GBAC do is get alongside the farmers to make as much of the farm revenue remain in the farm finances tank as possible so that the farmers can turn on the tap and spend it on themselves and the family whenever they want.

That is what decent farm debt consultants do. They work exclusively for the farmer and family more than anyone funded by the banks or government are ever likely to do. If they are any good they produce a huge return on the investment in their fees. Because they are serious, persistent and have a few secret weapons up their sleeves. Greg works for the farmers, not for the government or for the bank!

As farm debt consultants for many decades, with their own farming, accounting and business experience, the GBAC consultants don’t apologies for making billionaire banks write off dishonestly obtained debt to help farm families struggling with flood, fire and drought, price fluctuations and government policies. You can ring Greg on 0428 417 496 to see whether he might be able to help you borrow better or shed some of the debt.

Who is on the borrowers’ side? Bank debt consultants, for sure!

On the Australian Bankers Association website is a bank-friendly warning from ASIC, the so-called corporate regulator, about what they call “Debt management firms” who help borrowers manage their debts. Most Aussie borrowers don’t have debt management skills and banks take advantage of that. The warning says:

“AFCA and consumer groups continue to raise concerns with ASIC about the conduct of debt-management firms and the potential harms these entities may cause consumers, including that they may provide unsuitable services and engage in predatory conduct” – ASIC.

It all depends on who runs those firms.

What do Aussie borrowers need?

The “unsuitable” services, from the ABA viewpoint, that bank debt consultants might provide are to:
make the banks write off debt caused by predatory dishonest lending practices,
make banks share the suffering from deliberately trapping Aussie borrowers in unaffordable debt-traps,
make the banks give borrowers a repayment holiday when the industry or the economy go through tough times
help the borrowers increase their profits with cheaper loans, to clear their debts earlier.

The big bank protection racket

Banks have the opposite priority to borrowers. What makes the bank rich, makes the borrower poor.

Government too has the opposite priority to business borrowers. It seeks an expanding economy where money moves around and around to primarily create employment then end up in the government coffers through taxes. Business owners borrow then spend the money running the business with the suppliers, staff, marketers etc who spend the money again and so on and so forth.

Aussie borrowers however lose profits through interest they pay, but still need to earn enough profit, or surplus cash, to repay their loans. Otherwise they have “forever” debt and end up working for the bank and the government for life.

Bank debt consultants show borrowers how to retain as much of the money that comes in, as they can, to clear debt early and really enjoy running the business they are skilled at, instead of working day and night under increasing pressure from a rich bank.

Whoever pays the piper, calls the tune.

AFCA, ASIC, ACCC and the Bankers Association work against bank debt consultants obtaining fairer loans for borrowers, investigating inappropriate bank practices and generally helping Aussie borrowers who have been lied to, misled, cheated, defrauded or robbed by the bank. As bank debt consultants for many decades, with their own accounting and family business experience, the GBAC consultants don’t apologies for making billionaire banks write off dishonestly obtained debt to help Aussie families struggling with a cost-of-living crisis, housing crisis and not knowing whether the economy is going up or down.

While banks make billions-Aussie loan seekers look around

Banks are counting up their money

Banks are counting their half year profits in billions. They have so much spare cash that they don’t know what to do with it. Loan seekers are looking around to see how they can share in those billions. They are they working with their banking consultants to see how they can keep their businesses and farms secure and profitable by obtaining better loans. Sadly they often rely on people who are not really working for them at all – like bank paid brokers and counsellors. While loan seekers look for funds to expand, banks buy back their own shares to use up some of their surplus profits.

Loan Seekers want the Honey

Farm loan seekers face a trifecta of major challenges with seasons, commodity prices and government policies driving many to distraction. But they want the honey – the sweetest loan they can get. Getting the honey always takes a bit of effort but it is worth every bit. The easy way to get the very best honey flavoured farm and business loans, is to spray a bit of smoke around and put the bankers into competition with each other. There is an Aussie farmer/accountant who ran his own businesses, sheep and cattle and thinks that banks should be a lot fairer to their loan customers. His farm loan seeker website puts the banks & other lenders into the financial sale yards of www.farmloanseekers.au to see what offers they can come up with when competing against each other for the farmer’s business. Bankers sure can sharpen their pencils when they want the business!

Experience Counts

Business loan seekers too need the very best loans, not just on rates and charges, but terms and conditions as well. GBAC founder Greg Bloomfield ran businesses in real estate development and equipment hire. He joined his first public company board when he was 21. He was a Fellow of the Institute of Directors by 24, just before qualifying as a Chartered Accountant, CPA and company Secretary. He bought is first sheep property in the 1980’s and moved to cattle in 1990. Greg knows that the best family business security comes from having lenders compete for the loan business through www.businessloanseekers.au and having a consultant to whom your financial security is the absolute top priority.

It is staggering the number of businesses and farms that get wound up or closed down without ever seeking assistance with their loans and cash crises. GBAC has been doing that for half a century. It works partly because clients only deal with the bosses.

Cost-of-living crisis

Cost of living a burning issue

Cost-of-living crisis is top of mind of many Aussies in recent times. Top of the list are late loan repayments.

Loan Default

Default is what a borrower does when they fail to meet loan contract terms due to late loan repayments. It is usually caused by a cost-of-living or cashflow crisis. Late loan repayments causing a borrower to default on the loan agreement often result in the whole debt becoming due immediately. That can then lead to the home, farm or security property being sold up by the bank to clear the debt.

Cost of living causes problems for borrowers.

Many borrowers faced with lack of cash seem to hope the problem will just “go away”. It doesn’t! It is best to stay ahead of the game and initiate a call to the bank. If you are a business owner or farmer contact GBAC if you would like us to negotiate with your bank and or other trade creditors to give you breathing space. Mostly they will all help you once they know you have professional assistance and are doing your best to meet the loan terms. From a pure business perspective, they do not want to lose your business. They just want to know you are doing your best to fix the problem with professional guidance.

In one case we were called in to save the family home of a couple with three children. The bank was about to have the home auctioned. We had to move fast to deal with bankers, lawyers and sale trustees to prevent the sale and get the loan back on track.

Move fast for the agreement to last

In almost 40 years we have helped those who for one reason or another cannot make loan repayments on time. We have found very few cases where we cannot persuade the bank to give borrowers a break. Re-negotiation can restore loan repayments and continue the loan to its full term. The same applies to trade creditors.

Trusting trusts and inherited debts

In the 1960s and 70s, Trusts were used a lot for what was then called, “Estate Planning”. Changes in tax, land tax and family law have removed many of the benefits for owners of small and medium sized businesses . Trusts in estate planning can often see the next generation facing unfathomable complexity. It can be even worse if a consultant has suggested that a bank loan should be acquired by the younger generation to buy out their parents. Then inherited debt is added to trust complexity ensuring the need for expensive advisers to handling accounting and tax obligations each year.

Business owners should carefully weigh up the pros and cons before letting advisers set up trust for them.

Trusts set up for taxes and duties

The great advantage of the trust is that nobody actually owns the real estate or money, though someone is trustee or controls the company that is trustee. Death does not trigger death duty, because the business or home is not owned by anyone. But as there is no death duty that is largely irrelevant, though if it was introduced it might then be to late to wish there was a trust. Capital Gains Tax (CGT) may apply not apply either if the assets have been held for long enough and the transfer is related to retirement. Obtaining specific advice for each family situation is vital. General advice cannot apply to any individual situation without specific modification as applicable.

Many family businesses are handed on to the next generation. The same may apply to homes given the housing crisis inflicted by federal immigration policies, so a trust holding the title would suit. But, if there is no death duty and CGT does not apply, the advantage is not so obvious even from a tax viewpoint. But involving a bank in a succession plan can lead to the burden of inherited debt on the next generation

Estate planning that retains control

What a trust can do is allow the older generation to control what the younger generation does in the business. That is not always wise. Young people need freedom to innovate and make mistakes of their own. That is how we all learn.

A trust used to be a way for a family, handing on the business or home to the oldest son, to ensure that in the event of a marriage split-up, his wife or partner would not end up with a share of the home or business. Family law seems to have scuttled that idea and many would say that is a good thing.

Skip DIY when succession planning

Families business owners should obtain professional accounting and legal advice to determine what happens to the business and its assets. They should learn whether or not it is possible and if so, how the succession plan should be structured. Each family situation is unique so this is not a field for DIY on the basis of a note like this or any other. “When in doubt, find out!”

Danger of using trusts for succession planning

The danger in trusts, is profits distributed to family members to minimise tax rates, are often not paid out to the beneficiaries in cash. Rather, those profits may credited to them but reinvested. However, the money distribution belongs to those beneficiaries. Parents need to be aware of the risks of them using that money without written permission of the beneficiaries.

Complexity can be a major disadvantage of a trust deed. It can cost more in legal and accounting fees to eventually unscramble the trust structure. The results may yield no tangible or financial benefits in doing so.

Sense of achievement

Rather than give the business to the next generation it may be better for all parties to consider selling the business to the children or one child. That way the child gains the satisfaction of obtaining the business through their own efforts rather than as a gift. The parents benefit by having cash to spend after years of pouring it into the business. There are very good ways of doing all of this without involving bank debt. Not handing over debt to the children is fairer .

Why try GBAC?

Big professional firms, those associated with business organisations, banks or government are not necessarily appropriate for succession planning due to conflicts of interest. They are often very expensive. Succession planning should protect businesses from banks and government.

Greg has managed transfers, succession of a major business from his grandfather and a farm that was settled by his great-grandfather, to his generation. Greg and Pat have both been involved in running business and consulting.

In a world of excessive greed, GBAC lets clients say goodbye to that greed and hello to good old-fashioned service. That is where the client comes first and foremost and always deals with the principals.

Family farms and succession planning

Start a succession plan early

Succession planning comes up when mum and dad are looking to the future of the farm and want to leave their legacy to the next generation of farmers. It may start when the children are in their teens or be left until they are in their 50’s. The earlier the better, but flexibility is important for the plan to succeed.

The end goal of the succession plan

A one size fits all approach does not generally suit and handing over debt to the next generation increases the risk of the farm eventually being lost to the bank. Main factors to consider are the goals of the parents and children. That sets the pattern, but within those boundaries will be many complex issues, including relationships, finances, taxes, mortgages, competition amongst children and differing views of mum and dad.

Family conferences help

First step is discussions with each family member. This includes a sound understanding of the farm, its operations and finances and patient family conferences where people are encouraged to put their thoughts on the table. This should not be done as a final statement, but to open discussions. We really try at GBAC to get this right. Because, if handled badly it could make some family members feel badly done by.

Avoid surprises that could cause consternation

Succession planning needs gentle diplomacy. Often some family members have expectations that others don’t share. In the end we want to make everyone happy. That is why if Succession planning starts in their teens or twenties, everyone has a clear understanding of what is happening and most wishes can be accommodated over time.

Our role

What has helped us with succession planning for clients is experience. From my teens I was raised on Dale Carnegie’s book “How to win friends and influence people”. It gave me a different perspective on working with client families. What I learned about dealing with finances in my Chartered Accountancy courses. Running my own Merino property out west first was a good lead in to me succeeding my 2^nd cousin by purchasing from him the beef cattle property in the Araluen Valley out of Braidwood, originally settled by my great grandfather.

Farm or business debt needs caution in uncertain seasons

ABARE executive director Jared Greenville completed a recent article for farmers on volatile seasons with these words:

“Rather than growing the size of the enterprise or productivity by much, they’re setting the business up to manage the downside risks by simply not being as eager to borrow.”

These are wise words because the future looks quite risky when it comes to refinancing. But it is not only farmers who need to think carefully. Family businesses are under threat from climate change, the economy and big business. It pays to reduce risk in times like this to avoid a major disaster if things go wrong. Recession is looming in many places. The best way to minimise risk is to look for ways to relieve cost pressures. Debt relief would be one of the first. A perfectly happy loan can morph into a dangerous debt in just one or two years. That can also happen when banks appoint receivers to manage the business or farm.

Banks have been very lenient to borrowers since Covid. There are signs that they are starting to lose patience with loan defaults and look to recovery action like receivership. The current boom in prices of real estate has been partly caused by a decade-long boom. Banks seeking to recover debt, may seek to sell mortgaged properties before the boom busts. Many small business loans are secured by a mortgage over the business owner’s home

“Borrowing in good times; Refinancing in the bad”.

The annual Profit and Loss statement often shows banks earning more out of the enterprise than the business owner or farmer. A business loan consultant would know that dangerous debt can be reduced by a variety of means. The sale of an unproductive block may be one way. A write-off by a bank that has treated the borrower badly might be another.

Debt refinance can allow a farm or business loan to be cleared much faster or managed more easily. Borrowers coming to GBAC find, that negotiations with the bank can sometimes yield them more profit than they have earned for years in the business or farm. That particularly applies to those who have been tricked by the bank into unaffordable debt.

In running my own equipment and art hire businesses in Sydney I paid very close attention to my loans and creditors. Developing techniques and strategies with Profit in mind was the main goal. That is because profit is the main way of clearing any business debt.

Business or Farm Debt Refinancing

To make sure business owners, including farmers, get the right loan at the right price with the right loan terms we invented the “Farm Loan Seeker” (FLS) service four decades ago. Today it is an electronic means of borrowing without using an expensive bank-paid mortgage broker that just adds big costs to the loan. When a bank pays a broker up to $10,000 in brokerage to deliver customers on a plate, it expects to make a lot of money out of them. My view is to keep the total borrowing costs as low as possible. Business and farm borrowers can do their own loan hunting very successfully online with an FLS. The inexpensive FLS comes with a guide on dealing with the bank to get the best deal. GBAC will provide inexpensive optional support for various parts of the process if needed.

Borrowers should not assume that the people offering them a loan will look to their interest before their own, any more than the person buying from them will. People look after their own interests first. The Farm Loan Seeker we originally invented in 1987 when banks were first de-regulated. As well as helping other business owners get a fair go from the banks, I was running my two hire companies and a sheep property at the same time. A borrower should never trust the lender to do all the work. Lenders can be ruthlessly efficient at looking after their own interest. That often means agreements that put the borrower at a disadvantage.

Refinance Risks

Why refinance can have risks.

Refinance risks can vary, depending on a wide variety of circumstances. That is because a person who is refinancing is sometimes under more pressure than before. If refinance is not arranged within a specified timeframe, the existing bank could threatening receivership, appoint a manager or foreclosure and sale at auction. The borrower is looking for loan relief.

The best way to deal with that problem is to turn the tables on the bank from whom one is refinancing, by researching its behaviour to identify where it broke the law, the code of conduct or fair trading laws and then sitting down and telling it some home truths about what happens when you raise that by Votergram to some 225 Federal Politicians

Assessing refinance risks by comparing loan repayments against farm profit

“Generally, farmers’ confidence in the agriculture sector drives the demand for debt to fund land and capital acquisitions,” a banker said recently. The average farm profit was reported as $29,000. While many small country roads businesses are not so vulnerable to weather and commodity prices, many are with our major cities somewhat dependent on beach weather. Recent floods have devastated many businesses. Often such disasters dramatically reduce the security value of a mortgaged property. That is the ideal time to start gentle negotiations for the bank to write off a good bit of the debt. When the debt is reduced, the chances of refinanced are enhanced. Those who have played their cards right will often find themselves refinancing a much smaller debt. That is converting risk into advantage.

A Borrower’s Budget

It is vital for farmers and business operators to find out exactly how many dollars a year they will pay in loan repayments. Then compare that to their budgets. Make certain that the budget reflects the current reality rather than a fairy tale invented for a bank. Loan repayments and interest have to come out of profit. It is rash to think that the farm loan or the business loan will produce extra net profit. It often does no such thing and even if it does, it usually takes a few years to do so. A borrower’s budget is their best friend. It should regularly compared with the same period in the previous year and the actuals in the present year.

There is usually a big difference between the total income or turnover of the enterprise. Profit is the bit left after expenses. Loan repayments must be made from Profits. Don’t be misled by turnover!

Refinance Options

The problem is that a even a loan refinance can quickly turn into a debt trap. This can happen with a couple of bad years if the economy crumbles or flood waters cut business. My first reaction when confronted with refinance or even original loans has always been to see farm in drought if it is possible to achieve the same result without borrowing from a bank.

Over the years, I have shown farmers a variety of alternatives, from savings, to interest-free loans and trade-offs.

Assets can be acquired without getting the bank involved. Publicised interest rates and charges are not the best that can be achieved when borrowing. Offers of special rates and reduced charges requires negotiation. Those wanting to borrow on best terms and conditions, the “FarmloanSeeker” or “FLS” targets an enquiry to a range of banks. It is an easy way to check out what is available. Then negotiate the very best and cheapest loan possible.