The saga of the business loan continues. The wise bank branch manager has explained to me that the bank is looking for any reason to turn down loans, “we’re now in the loan denial business.” So I thought I’d listen to her “creative” idea for securing small-business bank money. Just another neighborhood banking service. Here goes:
If I fork over $125,000 for every $100,000 I want to borrow from my neighborhood bank (owned by a still-solvent international bank), they will give me a 10 year CD earning 1.5%!!!! Then, they will extend their $100,000 to me (really my $100,000 while they hold onto my $25,000) as a 10 year loan at 6%. Net loss for me to secure the loan is about 4.5 % plus lending the bank $125000!
This is comedy!
I asked her if I could offer the bank the same deal, in reverse. She laughed.
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