Ah yes, you gotta love the banks for giving us money when we need it. Are you kidding me? When we need it? They only want to loan you money or give you credit when you already have lots. Then you get phone calls even in the evening offering you money.
Thirteen years ago I purchased a building in which to work out of. I knew I wasn’t going to make a lot of money doing what I do but I thought that by paying on a mortgage instead of leasing I would accumulate capital that would turn into money when I was ready to retire. Wrong!
My husband and I are self-employed and each run our own business. Over the past 13 years he has definitely paid my bills lots of time when I couldn’t. I am very fortunate to have a husband who supports what I do even if it means not having lots of money just so long as I am happy. I worked day in and day out six days a week, sometimes seven. I rarely hired help because I really couldn’t afford to.
We had our building mortgage through Prospera Credit Union for about 12 years. My husband had a business line of credit with CIBC for probably 20 years. It was an unsecured line of credit relying on sales receipts from the previous years. We got the building mortgage through a broker and it ended up being with Prospera. That’s all good and all but in order to get the mortgage there we had to change where my husbands line of credit was. Prospera offered us a line of credit and $10,000 more than we had before. Somewhere along the way I forgot that the line of credit was secured by the building. I actually can’t remember ever signing papers to secure the line of credit that way but it was at least 12 years ago so I guess we must have agreed to it.
Fast forward to 2016. I talked to our “Business advisor” at Prospera about selling the building. He knew for 6 months that the building was being sold and never once asked what my husband’s business was going to do for a working line of credit once the building sold. Brian, my husband was bringing in $200,000. a year minimum for 12 years through Prospera (Gross earnings, definitely not net). His working line of credit was $60,000. My business was separate from his and the building was being used for my business not his. Yes this guy knew that because their financial institution was right on the corner of the same street. Anyway, the building sold and I kept him informed every step of the way and it took about four months for it all to go through. Here I am thinking that I would have cash to set my business up somewhere else in another building and pay out the debt that I had run up buying inventory. Not!
The buyers would not buy the building unless they had a tenant in it so I agreed that I would lease back the building for 2 years and that would give me lots of time and cash to set up somewhere else. We were getting so excited as the closing came near. We went to the Notary to sign the papers and I couldn’t believe my eyes when the Notary says we have to pay out My husband’s Business Line of Credit. Just like that, no warning, no discussion, no advise or options. He would no longer have a working line of credit and I would not have the $50,000 I needed to set up elsewhere, yet I was stuck doing a lease back now at this building for another 2 years. Everything I had worked my ass off for was gone. I realize that I should have remembered the line of credit was secured. Maybe I forgot because when he had his line of credit with CIBC it was unsecured and so I eventually assumed this one was too. Now because I sold my building, his line of credit was taken away. Not to mention that after the first 10 years of having a mortgage with Prospera this “Financial Genius” refused to renew our mortgage so for the last 5 years of it we were paying 5.5 percent on a mortgage instead of about 3%. Don’t you think that he would want to keep our business accounts with them instead of taking away the line of credit? Shouldn’t he have at least talked to us about what we were going to do for my husband’s business like maybe applying for a new one now that all of our bills were paid off. He had 6 months to at least make an attempt to converse with us and advise but there was nothing, no gentle reminder that he would lose his line of credit, nothing.
The day after the sale of the building went through and the money went in the bank less the $50,000 line of credit, we proceeded to pay bills. I had to wait for a week for all checks to clear and I was going to Prospera to close our accounts. Our “business advisor” was there as I was closing the account. He did not realize that I was closing the account. He says, “Congratulations on the sale of your building! Do you want to come in for a coffee and have a chat?” I just glared at him and said, “Now you want to have a chat? I am just here to close the account. You took away my husband’s line of credit and now you want to chat? I don’t think so!” and away I walked.
I was very thankful that even though we had stopped using CIBC I hadn’t closed the line of credit account so it was still available to us. I immediately ordered new checks and went back to old faithful at CIBC. Lesson learned.
I am in the process of selling out of inventory and trying to set up another business that doesn’t have as much overhead but I don’t know how that is going to go. I do not want Brian to have to continue to pay my way anymore and I continually feel guilty for making him lose his line of credit at Prospera. We have lots of cash available to us in the form of lines of credit etc. but at my age I don’t want to start over and get way in to debt, that was the purpose of selling the building. In fact CIBC is calling us asking what they can do for us but I just say, “no thanks we are fine.” I’m just going to try to sell my inventory and figure something else out. I might have to just stay home, ugh! I guess I have to wait and see!
Thank you for listening,
I’m Frazzled Again!