The way the season is going none of us would be out fencing in this heat, so why not sit inside and focus on farm finance? Not your cup of tea? Well as a city boy with two grandfathers in farming, who took on breeding merinos and then Herefords, I never saw myself pulling calves. But it worked ok. Then I got a small grey “Square Meater” bull for the heifers and never pulled another calf.

In the same way it is good to have a go at the farm finances because there are really simple rules. Follow them and  it will probably work well for you.

Here are some Hints – from a farm debt consultant:

• Watch your income and spending every month, because yearly is like checking the stable door after the horse has bolted.
• When waiting for irregular income like the annual weaner or a crop sale, keep spending as low as possible.
• Avoid borrowing whenever you can. Once you have the bank monkey on your back it is very hard to shake it off and can absorb all the money you should have enjoyed from working sunup to sundown.
• The word “Mortgage” means death pledge and for many Aussie farm families it is just that. While someone else holds your title deeds and a mortgage over them, your farm will always be at risk
• Clear debt as fast as possible. That way you avoid time, energy and money-wasters like Farm Debt Mediation or foreclosure.
• When the big cheques come in, squirrel 1/10^th or a 5^th away in a different bank in a different town. That will enable you to be your own banker. When you need funds to buy plant or breeders and you might have borrowed, you can instead finance it yourself and then pay the money back into that account at the other bank over time so that it is there next time you need it.
• If you do borrow, use our Borrow Better facility, be your own broker and save a heap of money.

Greg Bloomfield

What to do if your bank has you trapped in a high priced home, business or farm mortgage that may become more expensive, putting your home at risk through default. By law I can’t tell home-buyers  or other consumers for a fee, so I’ll tell you for free.

1 How did it happen
Banks and other lenders knew interest rates would probably rise from historic lows. By offering cheap mortgages for very expensive housing as well as for businesses and farms, they knew that as rates rose buyers would be trapped in unaffordable mortgage debt. Then they could nurse the borrowers along like pet rabbits destined for stew.

The interest they earn will grow with rate rises to give huge returns. Borrowers will slave away to meet repayments. Unmet interest can be added to the debt to earn more interest. If after a decade the debt gets close to the home value, the lenders can move in and sell the borrower up, absorbing the difference between debt and sale value by unbelievably high foreclosure charges.

Escape
On Monday I will start explaining the best options for borrowers to escape this carefully laid trap.

Big Banks earn their multi-billion dollar profits from mortgage loans. Bank CEOs take home multi-million-dollar salary packages. They don’t do that by looking after the interests of customers but by looking after their own interest first and foremost. Bank loans and more importantly difficult bank debt are money-spinners for bankers. But there is at least one bank  that tends to look after their customers, so all is not completely lost. Profit is why banks whole-heartedly support increased migration. Migrants need housing and housing requires lots of mortgage loans. Firstly the construction companies borrow from the banks to build the homes. Then the home-buyers take out a mortgage loan to buy a home. Then many home-buyers will borrow again to establish or buy a business or farm. Schools and hospitals if built at all, may required mortgage finance or contractors as do roads and public transport.

Specifics
A mortgage loan requires very specific payments to the bank at very specific times and very specific behaviour by the borrower over such a long period of time that in many cases it is impossible for the borrowers to know that they can meet all those repayments on time. The loan has very strict and damaging penalties written into it that most borrowers never read, understand or consider. A few days overdue once can be a default. Loan contracts are written in legalese so that most borrowers cannot understand what they are signing up for. GBAC always suggests that borrowers get a lawyer to advise them on contract terms and work through each paragraph with them. Sometimes the secret clauses have been hidden away in the contract where they are unlikely to be seen by the borrowers. What GBAC set out to do once banks were freed of the shackles of regulation was to provide bank debt solutions for businesses and farmers, two vulnerable groups of borrowers. Has the bank included a clause that you have to sell the mortgaged property? Has the bank inserted a clause that you must do something by a certain date that is impossible? Can it call in the loan at any time? Do you agree to give the bank your power of Attorney so that it can sell your place or operate on your bank account when  it likes.

Control
The bank is always in control because it holds a mortgage over the land and buildings which entitles it to sell them up at the slightest breach of conditions by the borrower. More banks and brokers than one imagines trick borrowers into mortgage loan contracts that they stand a good chance of being unable to adhere to. Banks then have them locked into the mortgage at higher rates of interest for years. Many never escape, though all who come to GBAC are offered that opportunity. When they accept that offer they move from underdog to control and for those who stick with GBAC until their debt is cleared they can make a lot of money out of the exercise.

Find out first
Borrowers would do well to consult GBAC before they borrow to make sure that the loan contract is designed so that they can meet its terms and do not get into trouble on the way. Greg Bloomfield established the GBAC Bank Debt Consultancy from his Chartered Accountancy practice when he saw how banks were robbing, cheating and defrauding their business and farm clients, long before the Royal Commission revealed that to the nation. His passion is fairness which is why he also formed FairGO to help Australian voters who felt let down by their politicians.

Speak quietly and carry a big stick
GBAC consultants are very polite but they carry that big stick. They know what to look for in the bank’s performance to find out what it is doing wrong.  The banks are  so concerned about being investigated that they have formed organisations of their own that sound independent, but are really the banks in disguise. Wolves sheep’s clothing!

Before signing a mortgage ( literally a death pledge) or engaging in a battle with a bank, a borrower would be very wise to have a chat with the consultants at GBAC. Everyone has their field of expertise due to aptitude, qualifications, experience and personality. At GBAC we have a very healthy dislike of bank malpractice on the basis of decades of dealing with it.

Celebrating with a discount
For the first time ever, to celebrate the birthday of its founder, GBAC is offering a 10% discount to new and existing customers who own and operate businesses and farms anywhere in Australia.  GBAC deals with people as far apart as King Island in the south, Far North Queensland in the north, The Kimberleys in WA. The discount applies during all of  August, so if you want help with any aspect of a bank mortgage loan, from application through disputes to foreclosure, contact GBAC and enjoy discounted services for the whole of August.

There are many paths to debt solutions. Banking Consultant GBAC is one. But banks only abuse customers as the Royal Commission discovered and reported, when politicians make it easy for them to do so. Most debt problems and disputes that we see at GBAC, are caused  by bank dishonesty or negligence. So the solution lies with our elected politicians and parliament. That is where bank customers have a lot of power. But banking is not the only problem area.

Disaster stalks society
Australia is walking a thin line between dangerous inflation with massive price hikes and dangerous recession with massive unemployment. Government services are already grossly inadequate for our exploding population and voters are suffering. Violent crime and murder threaten our lives. Regulators conspire with corporate crooks and businesses. Companies are failing and cutting staff. Banks cheat customers.

Driving democratic government
We are not ruled by a ruthless dictator but it could happen as it did in Germany. The people rule in Australia! They drive government via our elected parliament. Australia has a Voters Network, free of party politics, that gives enormous power to every individual Australian, young, middle-aged or old, who want to help drive government to do what they think is good and fair for them and our society. It has done so for 37 years. If you wonder why government is not doing what you want, chances are you have not joined Voters Network and told parliament what you want and why.

Bullies & bribers greedy and dishonest
Our Government is not really driven just by political parties. Greedy ruthless dishonest wealth-seekers bully and bribe our politicians to get a bigger share of our national wealth. We voters all need to stand beside our MPs, support and guide them to do what WE need and Australia needs, instead. When we all share the time, effort and costs, they are tiny. If each person involved contributed as much time and money as they might on a weekly cup of coffee, Australia would be a far better place for everyone.

Get involved and improve your life as well as Australia’s
Democracy is about control of government for voters via the Parliament of politicians who are far, far better than the media will ever let you believe. As a voter you too can and are entitled to, guide government to do what YOU want via our parliament. Australia needs your input for good government. The best way for you to  do your bit for Australia is to join Voters Network free and help campaign for what you see as needed. Better fairer bank lending might be top of your list.

“First to boom and first to bust” -the construction industry.

Road to Recession
Australia was moving dangerously closer to recession prior to Covid. To stimulate the economy by encouraging Australians to spend, the Reserve bank lowered interest rates. However debt is the very worst and most dangerous way to spend money. It is money that you don’t have to spend!

But Australians refused to be drawn into debt, having glanced what was happening elsewhere in the world. Lower and lower fell interest rates, but still Australians refused to borrow for fear of bad times ahead. So rates fell further to entice them.

Covid
But then Covid hit and to stop the economy from “tanking”, the government threw billions of dollars at the Australian people and at businesses in particular. Too much perhaps as it turned out. With enough for deposits and interest rates at unbelievably low rates, people rushed into borrowing for businesses, investment properties, farms and homes, cars and yachts. Prices skyrocketed with a bit of help from Russia to cut supplies. Debts skyrocketed along with them.

The low interest rates were too good to be true. It is said that if it is “too good to be true” then maybe it isn’t. Maybe it wasn’t. The interest rates started to skyrocket too.

When we bought our home the mortgage interest rate was 11% fixed for 25 years. The difference was that prices were very much lower even allowing for CPI. It was the same when we bought or expanded businesses and farms. The ultra-high prices as the growing Australian population moved into spending mode, meant that recently the interest was being charged on very high loans and so was very high itself in dollar terms.

What to do – Act early and fast!

Professionals are not likely to help you if it looks like you or your business will be facing bankruptcy or receivership within 6 months, as there is a serious risk that any fees you pay them could be clawed back by a liquidator or trustee in bankruptcy. So act early to get assistance or you may miss out.

Loans are being extended to cut the regular repayments, but that will increase the actual cost of everything bought on borrowed money, as more interest will be charged and the debt will go longer.

If you spend like mad in your business or privately, the economy might move ahead, or it might go backwards. If you spend up you might help Australia. If the economy goes back, then you might go broke yourself.

Many business people and consumers may decide to protect themselves first. Some have already done so. As consumers they may cut spending to bare essentials; buy only what is on special; take on extra paid work; make rather than buy. Businesses might cut spending to the bone, cutting staff, rent, marketing and that will impact the incomes and profit of other businesses, putting pressure on them to cut spending.

Debtors and creditors
Every situation is very different. For those businesses contacting GBAC we will assess the situation of each business’s debtors and creditors, then talk to them to calm them down. We ask debtors to pay as much as possible off their debts. Cool calm discussion is required to deal with a difficult situation as well as possible for all concerned. Panic is not going to help anyone. Nor is drowning your debtor customers when trying to keep yourself afloat. That can drown everyone. Businesses in cash trouble need to recognise their issues and look for the best solutions.

We will talk to creditors promptly and work out repayment plans that the business can afford and which also help the creditors. They don’t want to send their customers broke. They just want to survive too. Recessions don’t last for ever. Everyone must get through if they can with feasible repayment plans.

Billionaire Bankers
Can they afford to help their customers?      Of course they can?
Will they?    GBAC has persuaded banks to help loan customers all over Australia for 36 years. It takes research, assessment, leverage, persuasion, experience, skill, strategy and technique, dedication to outcomes. Our aim is Good Banking for Australian Customers. Without customers banks can’t survive. Customers can easily move banks to get a better deal. That is what our Borrow Better service is about.

We start by reviewing the bank loan and overdraft accounts and their documentation to see whether the fault lies with the business or the bankers. Often it is the bankers’ fault. They are the financial experts. They know best when to borrow and when not to; which companies can handle what debt and which cannot. Once the situation is clear then GBAC opens discussions with the bank to see how best to resolve the situation with as little as possible damage to the business or the bank.

Solutions
There are almost always reasonable solutions to any cash or loan repayment crisis. But the sooner they are tackled the more likely is a good solution. Borrowers sometimes get introduced to banks for loans like lambs led to slaughter, by highly paid bank mortgage brokers. The loans often do not match the customer’s needs, cater to economic recessions or ensure ability to service and repay.

GBAC never works for the bank. It always works for the customers alone.

The faster you contact GBAC for assistance the sooner your stress levels will settle and sensible solutions will be identified. As well as helping bank customers solve debt problems, we have run our own businesses and farms, so we know just what it is like to battle bank debt, creditor payments, debt collections, recessions and falling profits.

It will cost you nothing to call GBAC today on 0428 417 496 or 02 9988 3312 for a chat about what is stressing you about your mortgage-secured business or farm loan. We also offer the first hour of actual work on your issues completely free as our small contribution to helping the Australian business and farming community out of a very dangerous situation with their biggest assets on the line.

Sometimes mortgage borrowers – business, farm and home buyers, must feel a bit like the Three Little Pigs under siege by the Big Bad Wolf.

The Big Bad Bankers huffed and puffed in Australia from the 1970’s and eventually blew borrower regulatory protections right away. Those controls had been legislated by previous governments specifically to protect the Australian people from ruthless exploitation by big banks.

Once Upon a Time
There was a time when borrowers could go to a free enterprise bank, safe and secure in the knowledge that their duly elected parliament would protect them from any dishonest behaviour within the major banks. Those Aussies also had a range of government owned banks to bank with, whose major role was to serve their customers honestly and fairly. They provided honest competition and so the free-enterprise banks were honest too.

The ruthless profiteers in the free-enterprise banks became hungry. They soon set about, like the Big Bad Wolf, working out how to blow this protective wall away so they could devour more of the hard-earned assets of the Australian people, as those people borrowed to finance businesses, farms and homes. The bankers have succeeded beyond their wildest expectations. One look at their profits, will show you that. Business and farm borrowers contact GBAC from all over Australia for help with banking disputes.

Protection for bank customers blown away
Once bank de-regulation had given the major Australian banks more power to exploit those in need of loans, the job of dealing with the fall out was shared between two government bodies, ASIC and APRA. One might be excused for believing, from the report of the Banking Royal Commission, that these two bodies really worked more to protect the banking industry than to protect the Australian people. Whilst they regulated the banks to see that they were less likely to collapse and deprive shareholders of money invested in bank shares and also so that they did not damage the Australian economy or government, little attention at all was or is given to the dishonest practices which the banks used to transfer more and more of their customers’ assets to themselves by way of interest and charges.

Rate Rises
It seems amazing that given their multi-billion-dollar profits and multi-million dollar executive pay packets that as they discuss reasons for increasing their interest rates on poorer Australians, the Big Banks would not sacrifice some of their billions in profits to help their customers. Why would they when they have shareholders wanting maximum returns? Well it would seem the fair and decent thing to do. That’s all! Plenty of Aussies make sacrifices for others.

Moving to stronger protection
But the Three Little Pigs did not succumb to the Big Bad Wolf like Australian borrowers have to our Big Banks. They shifted to better protection, which one of them had been smart enough to have built.

The only protection that can save the struggling borrowers of Australia, is to do what the Three Little Pigs did, – move to better protection in a stronger situation. Like the Clever Little Pig who built the wolf-proof house, we voters could persuade our politicians to build us some government owned banks again, to protect us from these mega-powerful and ruthless Big Banks.

Government  and banks for the people.
Why not? Our Parliaments do work for us when we approach them properly. The Votergram service and Voterlobby I started over 37 years ago has proved that. Our GBAC Banking Consultancy began a year later and has been one of those to help these democracy services to operate so successfully. Those who do not get government doing what they want, usually fail for one of three reasons.
1 Their request is not fair to others.
2 They have asked the wrong people in the wrong way.
3 They have not persisted until they won.

To that end all Australians are invited to join the Bankwatch Crusade by joining Voters Network (voters.au) free. In the “Who told you about us” box, enter “Bankwatch”.

Then we will offer our Members of Parliament a great way to be remembered for giving us honest banking again. They might well glance at the Bendigo and Adelaide Bank – Community Bank and Rural Bank examples, with which government might even partner.

Farmers and small business owners work long hard hours, battle bad seasons and government policy to make ends meet, often to eke out a fairly modest profit for their trouble.

The area that often lies outside their field of expertise is borrowing. It is something they do only a few times in their lives and many see it as a bit like going to buy a piece of equipment. “ I’ll go and buy a loan today,” they say.

Nature of a mortgage
Problem is that a mortgage loan is not like that at all. For a farmer, it is like taking on a new stud bull, ram, stallion or enterprise. For a business owner it is like taking on a new branch, process, product or service. There can be very long-term and severe consequences of bad decisions.

There are masses of terms and conditions to a mortgage loan, the legal impact of which on the borrower’s farm, home, family or business cannot be accurately predicted because the future cannot be accurately predicted. Questions to be considered include , ‘What if I get seriously ill, or die? What if a recession, fire flood or drought hit me? What if my family breaks up? What if someone defrauds or cheats me of a lot of money? What if government policy or input prices change dramatically? What if my profits turn into losses for a year or so? What if I cannot meet payments on time? What if the bank forecloses, appoints receivers and managers, auctions my home, farm, business premises and it does not cover all the debt? Is my loan insured? Who does the insurance cover, me or the bank?

Banks have  changed
Banks are not like they used to be. You only have to look at their billion-dollar profits and multi-million dollar executive pay packets earned mainly from their customers to know that they are not primarily there to help you as their TV ads say. They are there to make as much money for themselves out of your loan as possible.

That means that just as you need to be on the alert every time you hop onto a horse or bike to muster stock, deal with a bull or stallion, handle an industrial dispute, tender for a job or manage a tax investigation, you need to be very alert when applying for a loan and before accepting any loan offer. There may be traps you do not expect and do not see. All over Australia for nearly four decades our bank loan specialists have helped borrowers deal with those unexpected traps, the receivers and managers, tough times that need loan re-sets. We always recommend that the borrower gets legal advice as well, but legal advice is not enough on its own. Financial aspects are critical.

Paying it back
When you go for a loan, see it as a major exercise. Remember that no matter how difficult getting the loan may be, as a wise farmer once told me, “Borrowing is the easy bit. It’s the paying it back that’s hard.”

The easier path
Borrow Better has been established so that farmers and business owners can easily obtain the best and most suitable loans in the first place.

GBAC was converted from a nation-wide Chartered Accountancy practice in 1990 to help borrowers, following the disasters that bank de-regulation brought down on so many of them with Swiss Franc loans. It provides easy inexpensive ways to manage loans so that they do not get out of hand and dispute resolution services including mediation and negotiation with bankers.

We have never come across bank loan problems that cannot be satisfactorily resolved. But we have seen many that have been mis-managed, just as there are plenty of times a muster, budget, machine or software can let us down.

There is right way and a wrong way to deal with a bank loan problem or debt dispute with a lender. In many cases it is more about strategy than the loan itself.

Trust can be dangerous
As a teen I was taught to “never trust a bull or stallion” and though the stud bulls we sold were very quiet, I never have. Nor would I ever trust a banker. No matter how good your broker or banker is, loan recovery actions will ultimately be determined by unseen and unknown directors, risk managers and debt collectors.

Be well prepared and stay alert when dealing with mortgage loans. They put your biggest asset at risk, hopefully to benefit you!