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As the title implies this module covers all aspects of borrowing from type of borrowing and its source to the terms of borrowing – interest rates and charges - and security. It deals with all the main fundamental issues of borrowing and explores the potential sources and when and if you should use them.
It tells you what rates you should be paying and how to counter rate increases that your bank are trying to apply as well as how to reduce current rates that are high and uncompetitive.
Content Headings of Module
- Feedback from you about our advice
- Frequently asked questions
- Introduction
- Purpose of this module
- What it should not be used for
- Earning a bank’s trust
- Expectations and forecasting
- Canons of Lending – What your bank manager should be looking for
- Purpose of borrowings – loan v overdraft
- Facility requirements
- Negotiating a two tier overdraft facility
- Tiered facilities and tiered interest rates
- “Hard Core” borrowing
- Unauthorised borrowing
- The Business case for borrowing
- Sources of finance
- Finding other sources of finance
- Raising cash personally for investment in the business short or long term
- Raising cash from credit card accounts
- Mixing business and personal banking at the same bank
- Business Angel and Venture Capital
- Repayment term and interest cover
- Security
- Property
- Debenture
- Other assets
- Personal guarantees
- Life assurance policies
- Loan and Overdraft repayment insurance policies
- Interest rates
- Base Rate “tracking” (Margin over Base Rate)
- Fixed rate agreements
- Managed rates
- LIBOR tracking
- Interest rate swaps
- Risk assessment, Credit Committees, Computers and market competition (Basel 2)
- The risk pricing cycle (read this if nothing else!)
- Credit committees and computers
- Basel 2 and how it affects Banks lending criteria to you
- Offset of credit balances
- Standard and target interest rates
- Relationship between loan rates and overdraft rates
- Pre Credit Crunch interest margins
- Effect of the Credit Crunch on interest margins
- Achieving a lower or maintaining your current interest rate
- Arrangement fees (by whatever name)
- Arrangement fees
- Management fees
- Target arrangement fees
- Other borrowing related fees – security, hard core borrowing, non-utilisation, minimum interest rates
- Borrowing Insurance policies
- Fees for early repayment
- Draft Bank Letter Suggestions
- Summary
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