14. Bank policy of termination of rural facilities

Farmers and Graziers who had all their banking facilities with an Australian bank, now faced different banking arrangements. Their bank was the subject of a takeover by a bank that did not have any branches in the area. Borrowers were advised by this bank to make other arrangements, as they did not want to take on their business and the new bank also refused to grant them the usual credit facilities to plant their crop. As a result, the Borrowers were unable to plant a crop and accordingly were unable to harvest for their annual income, which placed them in arrears with their interest payments.

The bank placed the loan in default, however, as a result of Farm Debt mediation, the bank and the Borrowers negotiated a settlement agreement.

Eastwood Securities Mortgage Fund lent the borrowers $950,000 at 45% LVR to pay out the Bank, pay outstanding creditors and provide working capital to sow the current seasons crop. Interest was capitalised into the loan for the first twelve-month term. Borrowers had a bumper season and are now in the process of returning to a major bank.

An excellent example of Eastwood Securities Mortgage Fund bridging loans.

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