[Personal Experience] Winning Because It's Military Land! Bank Negotiation Tactics That Secured a 0.5% Rate Cut During a Period of Rising Interest Rates

1. Reliable Profitable Management
Banks prioritize financial health above all else. The common tax-saving strategy of “using depreciation-based losses to offset income and receive a tax refund” actually lowers a bank’s assessment and is counterproductive in interest rate negotiations.

Banks look at “repayment sources,” not “tax savings.”

The primary criterion banks use to decide whether to grant loans or lower interest rates is “Can this person reliably repay the debt (repayment capacity)?”.

While there are cases where corporations are evaluated based on “if the cash flow after adding back depreciation is positive…”, the screening for sole proprietors (individual investors) is in a different league.

• Living expenses are considered: A sole proprietor’s income (profit) includes their own living expenses. Being in the red on the books is evaluated as “not even generating enough from the business to cover living expenses.”

• Branded as “lacking earning power”: No matter how much you excuse it by saying “it’s a loss on paper due to depreciation,” as long as the tax return shows a negative figure, the bank’s rating system will categorize you as a “customer requiring attention” or “underperforming business.”

As a result, even if you go to negotiate for a lower rate when interest rates rise, the bank will coldly dismiss you, saying, “With your current performance (losses), further concessions are impossible. If anything, we’d rather raise the rate.” and that is the inevitable outcome.
Consistently generating a profit is the foundation. 2. Abundant Cash (Liquidity)

By showing cash deposits that can withstand sudden vacancies or repairs, you are judged as a prime customer with extremely low default risk. Let’s think from the perspective of someone lending money. Would you lend to someone with little money? Will this person properly repay the money? The saying “

Banks lend umbrellas on sunny days and take them away on rainy days

” is a very famous phrase that sharply satirizes bank lending attitudes. ・Sunny days (when performance is good/the economy is booming)

: When you have sufficient funds and no need to borrow, the bank will actively come to lend you an umbrella (loan).

• Rainy days (when performance has worsened/the economy is in a recession): When you are truly struggling with cash flow and need help, they will refuse loans out of fear of risk, or conversely, rush to recover the money already lent (calling in loans/tightening credit), taking away the umbrella (loan).

In other words, it accurately describes the bank’s thorough self-preservation and risk-averse nature, which is “not helping when you are truly in trouble, and only being an ally when things are going great.” Understanding this “nature of banks (thoroughly avoiding risk)” is the fundamental prerequisite for advancing negotiations in your favor during this interest rate negotiation as well. 3.

A set proposal for additional borrowing (expanding the loan limit) Simply lowering interest rates only cuts into the bank’s profits. Therefore, I proposed a give-and-take: “In exchange for lowering the interest rate on the military land loan by 0.5%, I will expand the loan limit using the purchased military land as additional collateral.” For bank employees with quotas for new loans, proposals that increase the outstanding loan balance are easier to get approved.

“You want to lower the interest rate, yet you’re taking on more debt?!” Many of you might feel anxious about this, right?

Rest assured. By simply creating a loan limit with an overdraft-type military land loan, no interest is incurred because the loan is not actually executed. Even if interest is incurred, it can be offset by the military land rent, so the investor’s risk is also contained. Furthermore, by offering the military land as additional collateral for existing loans, you can lower the overall interest rate, including the loans you have already taken out.

For example, when a business opportunity arises, such as an attractive property or the need to invest in equipment for your business, you can utilize that loan limit to maximize your profits. A pinch is an opportunity.

A give-and-take that hits on the bank’s internal circumstances is the ultimate trump card for winning an interest rate reduction. ※Military land is currently in short supply. If you are selling military land, please feel free to consult with us at gunyouchi@gmail.com.