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Reply To: Why when I have spent 2k of government money on and Accountant and 50 hours of my own time preparing Cash flows and Budgets with several different turnovers and staffing levels which all show that my business of 12 years which has always made good profits can be viable but needs a cash injection  to trade through has been turned down because my HOUSE Mortgage is with another Bank.I have offered any security they might want against the house ( ie Caveat )  as I have 25% equity on today’s price but they say they are unable to make the loan under the current Govt rules as they don’t have control over the House Asset  ( I would move but fixed interest would mean 17 k of penalties. ) I’m going to aproach BNZ who hold my Morgage business to see if i move business banking to them they can give the loan.   If the govt is backing 80% what may house got to do with it. 

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Hi,

The first option to investigate is going to the bank that holds the first mortgage over your personal home and see if they will advance you more funds against the house, using the 25% equity you have available. I’m not sure you will have any success moving your business lending as currently a bank is unlikely to take on distressed lending.

The reason your business bank will not entertain a guarantee from your house lending entity is they have no control over your house as the first mortgagee controls the liquidation of your house should it be required to pay off business debt.

You will be eligible for the new SME business loans which is $10k plus $1.8k per employee so make sure you get access to that asap.

I was a corporate banker for 20yrs and would be more than happy to help you in discussions with your bank, it is often just getting to talk to the right person as they are big organisations.

If you want a hand with your bank let me know and I’ll send you my contact details.

Cheers
Chris