Access to money is greatly important for all businesses, particularly businesses who are looking to grow and expand. Business owners may be all too familiar with hearing a “no” from the bank, but why? Carbon’s finance experts have put together a few points that may explain why.
The broker hasn’t presented the deal correctly
Based on the fact that only 18% of all commercial lending deals go through brokers, not all brokers have the skill to help you. Now this doesn’t mean dealing direct with the bank is your best option. A good business broker is an amazing asset to you, due to the broker being able to work on your behalf and present your loan to all lenders. They also only get paid when they successfully help you and they’re paid for the help from the banks, not your profits!
There is no security to use
Many business loans are secured via residential property and for business owners, the family home is used as security. When times are good, it’s important to pay down debt on the family home to keep the “jaws” between valuation and amount owing as wide as possible. Having equity can mean purchasing a new business is possible, or refinancing to reduce your instalments and free up capital to invest into your business for a business loan, working capital or purchase equipment. During tougher times, it’s important to be disciplined and ensure you pay slightly more than minimum payments so you have a buffer should times get extra tough.
The numbers just don’t add up!
Many businesses operate profitably but paint a different picture on paper. Having financials that you can use as and when you need them can be important. There are still loan providers in the market who operate using a “low doc” approach, but the rate you end up paying could be significantly higher than compared to the best available. Similarly, some businesses leave getting their figures presented until the very last minute. Whilst that can sometimes be tactical, being organised and having a long term plan that’s well documented can be the difference between a successful application and not.
So what do Carbon Finance recommend?
Carbons Lead Senior Brokers Ryan Eastman and Jacob Reed, apply their experience in the industry to help you and your business. A thorough review of your balance sheet and a conversation about your businesses goals will be enough for them to establish whether they can help and save you money on existing loans or how to structure a new loan so that it works for your business. Ryan and Jacob have a panel of lenders they can call upon to assist you whether you’re a budding entrepreneur or a Director of an established business. Contact the Carbon Finance team today, on (08) 9446 8588.