09 Dec Unsecured Lending

What every business needs and why :

In terms of business lending , banks have positioned themselves to be providing six month deferred loans to small business.  In reality a stringent credit criteria applies  and banks appear to only want to deal with their current clients with an established history with them. The application process with the mainstream banks has become more painstaking with their additional requirements post Covid 19.

Borrowing against collateral such as property will mean you are always restricted by the loan to valuation ratio on your security with little flexibility.

Unsecured essentially means the loan is not secured by collateral such as the family home, however personal guarantees from directors and shareholders are required.

Common funding purposes for unsecured lending are , operating expenditure, bulk inventory purchases, maintaining liquidity through a growth phase or in instances where banks are tardy , fitouts, tertiary assets and paying out ATO debt.

Three reasons to access capital for your business now

1. Capitalise on stock purchases, especially in bulk , at a discount. Wholesale and retail businesses are about to experience their busiest months, and it happens all too often that orders aren’t able to be fulfilled or items are out of stock. Don’t miss out on opportunities to maximise revenue.
2. New opportunities. Although we’re still experiencing the economic stresses of COVID, business owners are skilled at rising to the challenge and identifying opportunity. Whether you’re expanding into new markets,or planning to offer new products and services, we can have the products to help fund your opportunity.
3. Prepare for the quiet months. With many industries slowing down from December to February, come March it can be difficult to get approved for finance when there has not been a lot of recent turnover. Before the summer slumber it might be a good time to prepare your cash flow for a busier pipeline, or access capital to prepay your creditors. With an unsecured business loan you can make extra repayments anytime , or even payout in full with no penalty.