A SPECIALIST BROKER FOR BUSINESS LOANS
ABOUT BUSINESS LOANS
Applying for a business loan differs slightly from applying for a mortgage or auto loan. Lenders will ask for financial information on borrowers, particularly regarding their businesses and this is something that borrowers need to be aware of right away.
In fact, requests for business loans are frequently turned down because the applicant did not prepare the necessary supporting documentation, as requested by the lender. The quality of the proposal’s research and the way it is presented with supporting materials has a significant impact on how successfully various loan application types turn out.
In response, we are here. We have the expertise to assist borrowers in putting together the required paperwork to support a business loan application and demonstrate, if necessary, that the company is capable of repaying the debt.
There are a number of considerations and decision to make prior to approaching any lender, such as:
- how much do you need to borrow
- what type of loan is needed, Term Loan or Line of Credit
- how much can the business reasonably afford to repay
- rate type is desired, fixed or variable rates
- how long is the need for the loan
- what security is offered to the lender.
A lot of paperwork concerning the company or the new endeavour must be prepared in advance in order to convince the lender as well as yourself that there is a capacity to pay.
For additional information on how to be ready for a business loan, see What’s Involved – Business Loans.
Different kinds of assets, such as real estate or corporate assets, can be used to secure or unsecured loans will be considered.
Generally speaking, the less security or non-property security you offer, the higher the loan’s interest rate will be by lenders under certain conditions.
Before approaching a lender for a loan, it is important to talk to your mortgage broker, your accountant and your business counsel.
When evaluating a loan application, lenders will take the company’s risk profile into account. Our staff are aware of what potential lenders are seeking and what they may deem dangerous, which helps them portray a firm favourably. Generally lenders look for:
- the level and nature of your security (what security is offered if loan defaults);
- the business ability to make regular loan repayments (cash flow risk); and
- the business’ ability to ultimately repay the debt (business risk), including any other debts of the business.
The following will influence a lender’s perception of the risk of a loan application:
- start-up businesses, new ventures
- lack of security
- lack of business history
- lack of experience in the industry
- levels of competition in the industry
- current economic conditions
- highly seasonal businesses
- lack of planning, market knowledge and finance skills
- poor credit history
TYPES OF LOANS
Business and commercial-related financial arrangements are the focus of our business finance team.
The team’s access to several finance sources from numerous lenders with a variety of loan conditions is a big advantage.
With such a wide variety of products and lenders, our staff will help you choose the best business finance solution at a competitive rate and with minimal costs.
WHAT'S INVOLVED - BUSINESS LOANS
Some important information regarding applying for a business loan was addressed in the section ‘About Business Loans.’
Here, we’ll go over some of the most important components of applying for a business loan and what the applicant should be aware of.
It’s essential to prepare ahead of time the number of documents about the business or the proposed venture not only to determine yourself if there is a capacity to pay but to convince the lender as well. Documents needed may include:
- detailed business plan;
- cash flows for a period at least equal to the term of the loan;
- set up costs; and
- past history of the business (tax returns).
Different kinds of assets, such as real estate or corporate assets, can be used to secure or unsecure loans.
Generally speaking, the less security or non-property security you offer, the higher the loan’s interest rate will be.
You may need to speak with your accountant or business consultant about the loan application and the requirement for the compilation of some supporting papers, depending on the kind of business or the age of the firm (new or existing).
It is essential that you comprehend what you are doing and that it is a sound business idea.
You, the applicant, must be able to persuade everyone around you—especially the lender—that you are knowledgeable about what you are doing and have given it careful consideration. If you have any reservations, they will only show in the application (through a lack of details and comments), which will affect how the lender views the transaction.
The following is a guide to key supporting documents lenders may request when assessing a business loan application:
- business tax returns;
- personal tax returns;
- cash flow forecasts;
- BAS statements (last 12 months);
- detailed business plan;
- business bank statement;
- personal bank statements;
- set up costs;
- expansion costs;
- past business history;
- details of current debtors and creditors; and
- details of current assets, including stock lists
Our team will happily work with you throughout this process to prepare a properly documented, well supported and justified Business Loan Application.
Refinancing is the process used when a borrower (personal or company) wants to change the loan’s conditions to alter the monthly payments. New lenders and product are frequently involved in this.
Nowadays, house loans make up the majority of refinanced loans since the present interest rate and costs are unacceptable to the borrower.
Important: While there are unquestionable benefits to refinancing, including the possibility of lower interest rates, any borrower should consider the costs associated with the process to determine if the savings outweigh them.
Loans are refinanced for a multitude of reasons, though primarily to;
Improve cash flow
If you are not happy with your present loan arrangements or believe you need to refinance for a financial benefit (savings or cash flow) contact us to discuss your plans.
Reason For The Refinance
The new lender will demand evidence to show that the purpose of the financing is to reduce interest rates and save money. Here, we help you decide whether the activity is advantageous.
In order to determine the savings of any new loan, we will examine your current loan, the statements, the rates and the period of the loan.
If the goal of the refinance is to obtain more money, the lender will want reasonable justifications for how the money will be used. Once more, we will consult with clients to ascertain whether the lender would accept the grounds for the cash out.