In the past twelve months, many of our clients came to see us to discuss business opportunities, restructuring, cashflow and working capital issues.

We appreciate there is the need for these types of discussions, as COVID has changed and challenged many traditional business plans. For the less fortunate business clients, they have just been seeking survival plans and basic financial support. Fortunately, the majority of our clients are in the growth phase of their businesses, as they were able to make good use of the lock-down period to develop new ideas and products. No matter what type or level of support was needed, they all needed to source finance to make their plans happen.

Based on our recent experiences supporting clients to complete a buy, sell and restructure of a business, we noted that the most challenging and frustrating stage of the work was at the Bank level. We worked so hard with the clients to get their accounts to a level where the Bank would agree to offer finance. However, somehow none of the transactions could settle without extended delays, and multiple complaints to the “highest authority of the Bank”.

Here are some of our client’s recent experiences dealing with the Banks:

Mavis & Richard – sale of commercial properties

Mavis & Richard (M & R), husband and wife own two commercial properties. They decided to sell one commercial property on the market and one commercial property to their Self-Managed Superfund (SMSF).

M & R have been with the same Bank for many years and were happy with the service level until their Client Relationship Manager (CRM) moved on. Ever since the new CRM took over their business loans portfolio our client repeatedly had to explain their business structure and the purpose of each loan to the new CRM. M & R’s frustration level escalated so they requested our Accountants’ support and assistance in responding to the CRM’s questions, hoping to expedite the process. Our Accountant prepared the structure diagram to link all the Business Loans and detailed the purpose of each Loan linked to the Entity. Sadly, and disappointingly the CRM could not make any sense out of it and the process was further delayed.

Our Accountant quickly referred M & R to the Finance Specialist we work with for advice and support. M & R didn’t go ahead with meeting with the Finance broker as the CRM promised to discharge the mortgage. On settlement day, what happened? The wrong property was discharged and settlement was delayed again! M & R were under so much stress as the CRM didn’t answer their urgent calls or emails. Fortunately, the Buyer was very understanding so M & R handed the keys to the Buyer on settlement day anyway. Without any apologies, the CRM finally discharged the correct Mortgage for settlement.

M & R contacted the highest authority within their Bank to lodge a complaint, and was given another CRM to support the next sale of the commercial property to their SMSF. Without judgement, our Accountants had to assist with this second transaction by explaining the structure diagram, confirming that no additional funding was required, and clarifying that it was just a market value sale to their own SMSF.

The Bank approved the application and passed on it for review. Just as all parties thought settlement could occur, the CRM came back after the review with multiple questions and an action list. Again, our Accountant referred M & R to the Finance Specialist for advice and support. With the Specialist’s help in the background, we were able to resolve all the Bank’s questions.

Finally, M & R received the paperwork to sign off and they hand-delivered them to the CRM, confirmed that all was received and there was nothing else to do. Their Solicitor sent settlement instructions to the Bank to schedule a settlement date. Guess what? The Mortgage Discharge document was missing, lost within the Bank’s (internal) delivery processes.

Settlement was rescheduled and M & R had to re-sign and return a second copy of the document. Their Solicitor contacted the Bank to book in a new settlement date. On settlement day, when they had their wine bottle out ready to pop at 5pm, their Solicitor phoned to say settlement hadn’t happened! It was now too late to contact the Bank to find out why the settlement cheques were not prepared for them to pick up at the Branch. The next day, their solicitor advised them that the Bank had lost the original settlement instruction form. Again, M & R had to re-sign the form with their Solicitor and express post the document directly to the Bank settlement team. Settlement finally happened, but without the joy of popping their bottle of wine, as they were now too traumatised and exhausted by the whole process.

Other “real problem” – examples:

• CRM not understanding their bank’s own internal processes, completing the wrong applications and sending information to the wrong department for review.
• Applications and requests stuck in the pipeline for months because nobody knew or bothered to ask the top for guidance and support, until the customers complained to the highest authority and threatened to claim damages.
• All of a sudden what couldn’t happen at the CRM and Branch level could be completed within two days of the complaint.

What is the wake-up call & get help early?

The days of simple banking processes, customer service satisfaction, experienced, knowledgeable and caring support from the banks are long gone!!! We have learned not to get frustrated with our clients on a spinning matter and expecting a miracle to occur in the short-term. Instead, we refer our clients to our trusted Finance Specialist who understands the bank’s application processes, knows where and when to direct the deals to the highest contact person in the Bank to ensure things happen for our clients.

• Don’t get frustrated and emotional with the Bank;
• Don’t attempt to fight the Bank yourself, as it can cost you with “an expensive price tag” and “high blood pressure”;
• Discuss your situation with our Specialist and let them drive the results for you;
• Free up your valuable time for family, business and enjoyable activities;
• Find yourself already in a spinning wheel and can’t get out of it, stop and get our Specialist’s help;
• It is easy to trust when the Bank is telling your matter is almost to the end, but devastating to realise much too late that they are only empty promises. Don’t risk it! Get the right help from the start.

Still have questions and need help?

Please feel free to get in touch with one of our advisors to find out how we can assist you in this area.