When people meet me in real life, they are often surprised by how tall I am.
As a kid, I was one of the ones who shot up quickly.
By the age of 12, I was already well over 6 feet tall.
I was easily the tallest in my class by 30cm and had the strength to match it.
My mother was often annoyed by how much she had to spend on school uniforms because I was constantly growing out of it.
My school had also noticed the growth spurt.
One day, my sports teacher pulled me aside and asked if I would like to play rugby.
He mentioned that I had a big advantage because of my size and would likely dominate the game.
He of course loved rugby and was keen to get some wins on the board for the school.
(School sports is a VERY competitive business.)
I liked the idea of having such an advantage.
I had never played the game but accepted his offer.
A few weeks later I went with my school to play my first match.
I was incredibly excited and ready for this to be a “walk in the park”.
….How did it actually go?
It was an absolute disaster!
Instead of dominating, I got dominated.
Despite my size advantage, I wasn’t able to use it.
Kids half my size were smashing me.
I didn’t know the rules of the game or any of the techniques needed to be good at the game. They did.
Turns out – there was a lot more to the game of rugby than I realised…
The same could be said about borrowing power for business owners.
There are a lot of big and even profitable business owners out there who think it will be easy to access finance.
It’s only when they need to get lending from the bank that they realise they had no advantage at all. (Just like me in that rugby match.)
In this week’s episode of the podcast, I sit down with Grant, my co-host and Aaron Whybrow, as we discuss 5 practical ways to increase your borrowing power.
There is a lot more to borrowing power than meets the eye.
So, if you are an Australian business owner this will be worth your time.
00:00 Welcome to Business and Investing
01:53 About Aaron, the bagpiping mortgage broker
05:07 How can you increase your borrowing capacity?
06:40 #1 Earn more money
09:53 Business growth vs increasing net profit
12:33 Can you leverage your partner’s income?
14:36 #2 Double down on debt
15:43 Types of debt
17:29 Not all debt is equal in the eyes of banks
22:00 Can you pay off bad debt with good debt?
23:06 Key debt to eliminate first
26:09 #3 Maintain your budget
28:02 Why you should track your personal and business budgets
29:45 Do banks consider income fluctuation?
33:41 #4 Buy an A-grade asset
36:34 How your investments affect your borrowing capacity
39:49 The dangers of underinvesting in your business
43:05 #5 Diversify your banks
44:35 How often do banks change their rules on lending?
47:51 Leverage the knowledge of mortgage brokers
49:53 Pay down your debt first
53:21 What happens to existing debt if your earning capacity drops?
57:00 Is there a ceiling to borrowing capacity?
If you enjoyed this episode, be sure to subscribe, tune in and share this podcast!
About the Guest:
Aaron Whybrow is the founder of Diagnostics and Finance, a Financial Broking and Personal Risk Insurance Business.
Diagnostics & Finance (ARW Financial Services Pty Ltd) is a Credit Representative 425540 of Finsure Finance & Insurance ACL 384704
He is known as the ‘bagpiping mortgage broker’, who prides himself on having no ‘flats’ in his career. He blends his experiences as a former intensive care unit nurse and medical sales rep to provide the best outcomes for his clients.
To connect with Aaron and his team of mortgage professionals, head over to https://businessandinvesting.com/partners/diagnostics-and-finance/
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