Business finance - the right strategy, facility and repayment structure delivered in a timely manner
At AFNCF we have access to a very wide range of business lenders, the major banks, second tier banks, specialist business, property and equipment financiers, as well as a growing number of FinTech's. There are literally hundreds of lenders - each with their own appetite for risk. Rates, guidelines and fees which can vary on a daily basis.
Lenders are in business to make a profit for their organisation - They're mostly good people but they don't necessarily have your best interests at heart. Very few have actually been a business owner. They understand the theories of business, but not the pressures & stresses that you face day after day.
Notes of caution: As a business borrower you don't have the same legal protection that applies to consumer (non-business loans). Often when we apply for finance, we are under pressure - we hear what we want to hear and sometimes get it wrong.
- Indicative terms sheets are not an offer of finance.
- An offer of finance must be in writing and signed by an authorised signatory of the lender. Brokers don't have loan approval authority.
- An indicative offer of finance by a lender is not a binding promise to provide finance and usually subject to a number of conditions being satisfied before an unconditional offer is issued.
- Make sure that you understand the terms and conditions of any offer.
- Understand the costs associated with the facility. If you're applying for a short-term property loan with an urgent settlement - the application, valuation & legal fees can be very expensive - Valuations will usually be done on a fire sale basis and could be much less than you anticipate - if you can't settle you may still be liable for very some very significant costs.
- Loan documentation can be very detailed, complex, and difficult for the average borrower to understand. We strongly recommend that you take the time to read it thoroughly and seek independent legal and financial advice.
- What do you need the funds for? Many lenders won't lend to pay ATO debts, refinance loans in arrears, or to fund taking cash out of a business, refinancing directors' loans etc.,
- How much do you need to borrow? Does the amount include costs and possibly capitalised interest?
- When do you need the funds? If you need the funds within a few days or a few hours, a loan secured by mortgage or caveat on a property is possible but not through a bank. Many of the "fintech lenders" can approve and settle substantial business loans within 24 hours - and sometimes a lot less.
- What's more important - interest rate or fast settlement? Rate can be a minor consideration if you need the money "now" to pay an ATO debt, or a creditor is threatening action, or your lender of choice can't fund a property settlement on time. Perhaps you have the chance to make an extraordinary profit on a business transaction if you can make the payment within 24-48 hours!
- What security are you prepared to offer? Loans secured by real estate are generally cheaper, loans secured on business assets are more expensive, some unsecured loans can be very expensive. If there are other parties involved - are they aligned / in agreement? Do you want to use your home as security or caught under an all-monies agreement if you use the lender that finances your home loan? Do your business partner and/or your life partner also agree?
- How long do you need the funds? short / emergency loans are generally dearer, is a longer term available without penalty if you pay back early? Is a two-step process preferable?
- How are you going to service the interest payments? - from cashflow, rental income, or do you need to capitalise the interest?
- What's your exit strategy? - how are you going to repay the principal amount? - Sale, refinance, profit?
Before we recommend any products, services or lenders we'll need to undertake a detailed review of the businesses existing finance facilities and gain a good understanding of where you're headed.
We'll then provide detailed recommendations with a fully costed implementation strategy. Post settlement we will provide ongoing monitoring and advice to ensure that your new business finance facility achieves the desired goals. We will help manage your relationships with your lenders. Periodically we'll review your business finance needs with you and make suggestions where necessary.
To have an obligation free discussion about improving your business finance - Click here