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Dealing with large banks in a pain. If I throw $15,000,000 at a local or regional bank I'm their #1 customer. Do the same with Citi and I'm a line item.
Yeah but I don't want to move my balances and update all receivables. I will if they don't play ball, but that's my last resort.
You should talk to at least 1 or 2 other banks. You don't know what the market rate is if you don't.
I keep two active bank accounts and two separate banks exactly for reasons such as this. You can then play one off of the other and get a much better deal (on many things, not just LOC, but wire txfr fees, ACH fees, etc..). If you have that much of an average daily balance, you'd be surprised what some banks will give you for an interest rate compared to others...especially if they know you have an alternative.
As the previous poster mentioned, smaller local/regional banks tend to treat people with 7 figure business bank accounts as a premium VVVIP to them whereas the big banks do not. Each have their own pro's and con's, but having 2 accounts and 2 different institutions is something I've found tremendously helpful over the years. I don't keep that large of a balance, but I do have a 7 figure real-estate loan for my building with one of them.
Yes, 100% agree with having multiple accounts. While I do most of my borrowing with local/regional banks, I do keep accounts with large banks; mostly for bringing in business, but also to keep those doors open.
I can understand that. I wish I had some better advice for you. Chances are high they are going to nickel and dime you but going in prepared is your best option.
No bank is perfect and my experience with large banks hasn't been all bad. I've seen glimpses of competency however I was at the time shopping a $45,000,000 note. Sometimes even with large banks it can come down to the specific individuals you are dealing with.
Mine is 10% of gross, how RBC calculates it
Doesn't appear that you need a LOC.
What would make you say that?
Why would you pay interest when you have 2 million cash on average?
If you can lock in interest for less than the market is paying on it, why not?
That and we don’t know the specifics of this business. Maybe it’s a business with high volume of transactions. Maybe it’s volatile. Maybe it’s just comforting from a reserving point of view.
Yeah two mil would be an unfathomable amount of cash on hand for me, but OPs biz could burn through that monthly for all we know.
Sorry to break it to you but no one is pricing their loc at that rate. Floor rates are currently prime plus a margin. Not even big corporations get what you want.