By Cam McLellan
Who should you be dealing with? It’s time to finally understand each of the bank’s internal departments.
The bank’s attitude towards you will change as your portfolio grows and your business becomes more valuable to them. This being the case it’s important that you understand your progression through the bank’s different departments. Your alignment with each department will dramatically affect your borrowing capacity and therefore the growth of you wealth.
The diagram below gives you a general overview of the internal structure of a bank. You will operate in the retail or consumer space for the first dozen or so properties you buy, where you can get as much as 95% LVR with the help of mortgage insurers. Each area of the bank has different lending regulations.
Many people make the mistake of dealing only in the commercial area for their business trading operations, and their personal wealth creation. It’s important to separate your business banking and your personal wealth creation banking. Commercial banking for example, may only lend 65 to 75% of the asset’s value whereas the area that handles private wealth creation will lend at 80%.
By clearly presenting your proposal to the bank each time you make an application they will begin to understand your investment strategy. This helps them to align you with the right area of the bank. When you’re aligned with the right area of the bank they start to become valued partners in your wealth creation plan.