steveblack
1st September 2010, 20:53
Hi All,
Hope someone can share their wisdom.:|
In October 2007, I launched my own franchised fast food restaurant. To help with financing I leased much of my equipment from a division of one of the large banks. Both leases were for 4 years. Although I had more capital, I was reserving it for a future purchase.
In June 2008 I contacted my sales rep enquiring about placing a large lump sum into the leasing. The figure I suggested would have cleared one of the agreements off and taken a chunk out of the other. I contacted my sales rep to ask if there would be any benefit or penalty in doing so. I was advised, in writing, that there would be no beneft and that I would be better putting my cash into a high interest account (even though interest rates were hitting rock bottom and would never surpass that of my leases).
Taking this instruction as being 'gospel', I decided not to pay off the set rate lease.
In July of this year, I received contact from a new 'relationship manager'. I again enquired about early payment. To my astonishment, I was advised that any early settlement would result in me getting 25% of my outstanding interest back. However, as you mainly pay of interest at the start of the agreement and capital towards the end, 25% is now next to nothing.
I have complained to the company. They have acknowledged the error is at their end and have described it as a 'misunderstanding on her (sales reps) part'.
I was then given an improved offer and advised that I had 1 business day to accept the offer. The company has elected not to tell me how much I would have saved if I had cleared the debt in June 2008 even though I have now requested it 3 times.
In conclusion, I have been given wrong advice by one of the big banks. This has in turn increased their profit and decreased mine.:mad:
Can anyone give me some pointers? sorry if I have rambled on.
Thanks in advance for your time
Steve
Hope someone can share their wisdom.:|
In October 2007, I launched my own franchised fast food restaurant. To help with financing I leased much of my equipment from a division of one of the large banks. Both leases were for 4 years. Although I had more capital, I was reserving it for a future purchase.
In June 2008 I contacted my sales rep enquiring about placing a large lump sum into the leasing. The figure I suggested would have cleared one of the agreements off and taken a chunk out of the other. I contacted my sales rep to ask if there would be any benefit or penalty in doing so. I was advised, in writing, that there would be no beneft and that I would be better putting my cash into a high interest account (even though interest rates were hitting rock bottom and would never surpass that of my leases).
Taking this instruction as being 'gospel', I decided not to pay off the set rate lease.
In July of this year, I received contact from a new 'relationship manager'. I again enquired about early payment. To my astonishment, I was advised that any early settlement would result in me getting 25% of my outstanding interest back. However, as you mainly pay of interest at the start of the agreement and capital towards the end, 25% is now next to nothing.
I have complained to the company. They have acknowledged the error is at their end and have described it as a 'misunderstanding on her (sales reps) part'.
I was then given an improved offer and advised that I had 1 business day to accept the offer. The company has elected not to tell me how much I would have saved if I had cleared the debt in June 2008 even though I have now requested it 3 times.
In conclusion, I have been given wrong advice by one of the big banks. This has in turn increased their profit and decreased mine.:mad:
Can anyone give me some pointers? sorry if I have rambled on.
Thanks in advance for your time
Steve