For this edition, I thought I’d provide an update on some of the current niches within the commercial finance market.

Small Business Loans – Secured by property

  • It continues to be a very competitive landscape with banks competing for market share. As such, small business loan interest rates are starting from 3.49% pa (variable) and 3.50% pa (2 years fixed) – 3.55% pa (3 years fixed) for loans up to $1 million.
  • Residential and/or commercial real estate security accepted.
  • These rates may also be available on a low documentation (Low-Doc) basis also which may be helpful to those whose financials are not yet lodged. In this case BAS returns may be used in lieu of financials.

Small Business Loans – Unsecured

  • Short-term small business loans from $5,000 – $500,000 may be funded within 24-48 hours.
  • Financial statements not required for loan amounts up to $150,000 as borrowing capacity is determined based on bank statement data (via bank statement internet link-up).
  • Real estate security is not always required to access funding, making this a useful solution for those that do not have property, equity or the appetite to put their home on the line.

Commercial Property Loans

  • Commercial property loans available without the need for personal/directors’ guarantees where Loan to Value Ratios (LVRs) are lower than 60%.
  • Rates for loans under $1 million are starting from 3.49% pa (variable, as above).
  • Rates for loans over $1 million starting from 3.75% pa however are based on BBSY + Risk Margin so may be less or more depending on the business/management profile. The loan amount also plays a big part of the rate discussion with higher loan amounts usually getting larger discounts.

Asset Finance

  • Trucks & trailers, vehicles, yellow goods, plant & equipment and many more asset types may be financed for new start-up businesses with little to no trading history.
  • In this case, the lender may require a ‘work source letter’ or contract and/or bank statements (via bank statement internet link-up) to establish borrowing capacity;
  • This policy is helpful to those who have for example, worked for a transport company as a truck driver but now wish to buy their own truck and to contract back to their previous employer.

Private Lending

  • Rates starting from 6.99% pa for loans with LVRs lower than 60%.
  • Acceptable security is standard residential property (houses) in metropolitan Melbourne, Sydney and Brisbane only.
  • LIMITED TIME ONLY expiring end of February.
  • Rates from 7.49% pa for loans with LVRs between 60%-65% (same security requirements).
  • We can still find a home for anything outside of the above criteria, however pricing will differ.

Debtor & Supply Chain Finance

  • Solutions for construction industry available. This may be useful to those getting paid by progress payments, which many lenders cannot accommodate.
  • Your debtor book is used as security and therefore real estate security is not required.
  • Create stronger relationships with your suppliers by providing them with a facility to take payment earlier via Supply Chain Finance. This is a novel lending facility that is gaining popularity as it not only allows your suppliers to be paid earlier (by the lender) but also may avail you of any discounts your suppliers may offer for early payment whilst giving you up to 90 days to pay back the lender.

If you have any lending requirements that you would like to discuss, whether listed above or not, please feel free to reach out for an obligation free workshop.

Disclaimer: The information provided herein is for general information purposes only and does not constitute specific advice. It should not be relied upon for the purposes of entering into any legal or financial commitments. Specific advice should be obtained from a suitably qualified professional before adopting any investment/financial strategy.