YOU DIVERSIFY YOUR INVESTMENTS… SO SHOULDN’T YOU DIVERSIFY YOUR DEBT?

If you have ever sat down with a financial planner and discussed a wealth creation plan, you would have heard them say: “Don’t put all your eggs in one basket”. The best way to structure your investments may be to spread your exposure across property or property trusts, shares, cash and annuities, in other words different asset classes.

Similarly, when choosing an appropriate superannuation fund, one consideration is what ‘spread’ of investments they make on my behalf amongst International shares, Australian shares, blue chip stocks, the mining and/or industrial sectors.

So why is it that some people feel comfortable with all their personal & business debt with one bank?

There is a belief that the bank treats your home/personal lending separately to your business debt, when in fact there is an ‘all mortgages clause’ in the fine print of most Terms & Conditions that effectively links any equity that you have in personal assets to business debt.

This means that you may as well have offered the bank a registered mortgage over your family home at the time of taking out the business loan! So, while holding all that security, do the banks offer you a discount or preferential interest rate on your borrowings? The answer to that, as you may have guessed, is usually NO.

If it makes sense to diversify your investment and superannuation strategies, doesn’t it also make sense to separate your personal core banking requirements from your business debt and spread this exposure across a number of other banks and finance companies?

With access to over 27 banks & finance companies, Transport Finance can provide a free, no-obligation assessment of your current debt structure and can separate your personal borrowings from those of your business. We can also ensure, where possible, that any
business borrowings required for your transport or machinery related equipment are funded in their own right and not secured against your home or other personal assets.

At times when you have a need to contact your bank to increase your overdraft or borrow an additional amount to assist cashflow, now is not the time to have all your loans under the one roof.

Talk to Transport Finance about ensuring you have the correct banking structure which separates your personal wealth from your business asset debt.

 

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