Westpac

Primary banking partner providing transactional accounts, loan facility, and overdraft facility. Westpac loan ($100,000) taken October 2025; repayment schedule requires reconciliation to properly allocate interest expense.

Overdraft Facility

Updated 2026-04-11: Overdraft facility not previously documented. Added per Mat O’Keefe, meeting 11 April 2026.

Overdraft limit: $145,000 Purpose: Working capital lifeline negotiated by Mat for operational flexibility. Status: Active and being drawn upon. Mat states the facility was “put in place with the intention never to have to use it” but revenue decline is now consuming the buffer. Callable: Westpac retains the contractual right to demand full repayment at any time — “they’ve got a right under the agreement just to pull it any time and demand all their money back, which includes whatever’s in the overdraft and a loan.” This means Westpac could simultaneously demand the overdraft balance plus the ~$93,000 outstanding loan principal. Risk: If Westpac’s algorithm detects sustained bleeding (overdraft absorbing losses rather than occasional dips), they may call the facility. Mat identifies this as a critical existential risk.

Note: Mat states the outstanding loan principal is $93,000 (meeting 11 Apr 2026). Xero shows net principal of $88,425 after 5 repayments of $2,315. The discrepancy ($4,575) may reflect fees, interest capitalisation, or Mat’s approximation. Requires reconciliation against Westpac amortisation schedule.

Bank Accounts with Westpac

Westpac 652203:

• Statement balance (as at 30 Mar 2026): $20,826.61
• Xero balance: $136,884.52
• Difference: $116,057.91 (unreconciled items: 588)

This is Pride’s primary operating account. Material reconciliation gap suggests outstanding cheques, uncleared deposits, or unallocated bank entries.

Staff Petty Purchase account:

• Statement balance: $4,584.18
• Xero balance: ($11,121.28)
• Difference: $15,705.46 (unreconciled items: 86)

Westpac loan facility (account WL in Xero):

• Loan amount: $100,000.00
• Loan date: 14 October 2025
• Monthly repayment: $2,315.00
• Repayment start: November 2025
• Repayments made: 5 (Nov 2025 – Mar 2026)
• Cumulative repaid: $11,575.00
• Net principal (in Xero): $88,425.00

Loan Accounting Issues

Problem 1: Wrong account coding

• Westpac repayments being allocated to account 901 (Loan-Westpac) instead of WL (Westpac Loan of 100,000)
• Result: WL stuck at $100,000 (appears no repayments made); 901 going negative (debit balance on liability = wrong direction)

Problem 2: Interest not separated

• Monthly repayment of $2,315 includes both principal and interest
• Entire amount coded to loan liability; no interest expense recorded
• Without Westpac amortisation schedule, cannot split components retroactively

Proposed corrections:

Phase 1 (consolidate accounts):

• Transfer 901 balance to WL: DR WL $11,575 / CR 901 $11,575
• Brings WL to correct net balance of $88,425; zeros 901 account

Phase 2 (fix interest allocation—requires Westpac schedule):

• Obtain loan amortisation schedule from Westpac
• Determine principal and interest components of each $2,315 payment
• Post journals to move interest portion from WL to interest expense account (WLI)
• Set up bank rule so future repayments auto-split correctly

Bank Reconciliation Status

Three Westpac accounts show material differences between statement balance and Xero balance:

1. Westpac 652203: $116,057.91 difference (588 unreconciled items)
2. Staff Petty Purchase: $15,705.46 difference (86 unreconciled items)
3. CBA 9522: $18,259.56 difference (107 unreconciled items) — technically CBA, not Westpac

All require detailed reconciliation work to identify outstanding cheques, uncleared deposits, duplicate entries, and outstanding vendor payments.

Action Items

1. Obtain Westpac loan amortisation schedule — essential for principal/interest split
2. Correct account coding for repayments — post consolidation journal transferring 901 to WL
3. Set up bank rule for $2,315 monthly repayment once schedule received
4. Reconcile Westpac 652203 account — 588 outstanding items need investigation
5. Reconcile Staff Petty Purchase account — 86 outstanding items need investigation

Debt Consolidation Pathway (April 2026)

Added per Hospitality Debt Restructuring Research.

Westpac is the recommended first approach for debt consolidation, leveraging the existing banking relationship. The BizEdge platform can process loans under $500k in under 4 hours for existing customers.

Consolidation Case

Consolidate Lumi ($144,800) + existing Westpac commercial ($88,400) = $233,200 into a single secured business loan at 7.5–9.5%. This saves $52,000–$68,000/year in debt service.

Frame the approach as “cash flow optimisation through debt consolidation” — request a meeting with the business banker.

Alternative: Judo Bank

Judo Bank has a dedicated hospitality lending team in Melbourne with specialist relationship bankers. Terms up to 15 years. Minimum $250k lending fits if all debts consolidated or working capital headroom added. Should be approached simultaneously as a competing quote.

Security Requirement

Sub-10% rates require property security (residential at 80% LVR or commercial at 65–70% LVR). Without property, unsecured rates will be 12–20%+ p.a.

See Debt Restructuring Options for full decision framework and action sequence.

Related Pages

• Loan Accounts Diagnostic — overview of all Pride’s loan facilities
• Westpac — detailed diagnostic of account coding and interest allocation problems
• Bank Reconciliation — process for matching bank statements to Xero ledger
• Interest Expense Recognition — how to properly allocate interest on all loans
• Financial Reporting — impact on P&L and Balance Sheet
• Debt Restructuring Options — consolidation pathway and decision framework
• Hospitality Debt Restructuring Research — source: market rates and lender recommendations