DEB PURVIS CASE STUDY: SUCCESSION PLAN FUNDING ACHIEVED

A generational farmer required funds to implement a final stage of their succession plan.  It involved purchasing land from a family member and dissolving a business partnership.  He was a lifelong client of his bank and normally would have approached the bank himself, comfortable in the thought that his long-standing relationship with his bank would ensure he received the best rates possible.

His financial advisor suggested that he approach other banks to test the market.   The client engaged RSP to manage a tender process for him.

A professional credit submission for the required $2,000,000 was prepared and presented to the market.   It was an attractive proposition for the banks which ensured strong competition.  Interestingly his current bank came back with rates 1% higher than the best offer received.

This really tested the client’s loyalty to a bank that he had enjoyed a good relationship for many years.   He questioned past dealings and was very disappointed that they hadn’t been competitive.

So how did this end?

Initial Outcome

The client met with the manager from one of the other banks and established that the finance package and relationship proposition being offered fitted with his business requirements.

The client was positioned to refinance his existing debt and the new debt to another bank and begin enjoying a positive relationship with his new bank.

Final Outcome

He did however, value the relationship with his manager, and RSP spent some time negotiating with the current bank and was able to achieve rates that were in line with those being offered by other banks.

The client is now more aware of the value in a tender process for his banking business and is committed to a regular review process with RSP.

 

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