Bushfires started off a terrible year for Australian businesses

With bushfires, pandemics and the tightening of bank purse strings, businesses are confused about where to turn for funding. Private Mortgages Australia wants brokers to know that there are private loan options available.

With the impacts of Coronavirus being felt deeply by Australian businesses in 2020, we’ve seen the needs of business borrowers change and therefore the role of commercial lenders has also needed to evolve. During these unprecedented times, there are certain scenarios that have cropped up where a private lender is the best option for a borrower. Private Mortgages Australia has enhanced our offering to make sure we’re providing solutions that suits the specific needs of business borrowers that often fall through the cracks with traditional lenders.

The financial needs of an SME during a crisis are varied but generally it is the necessity for short-term support until things get back to normal. Requirements can include:

  • general cash flow to keep the business operating, paying employees or to progress projects
  • purchase of assets or investments
  • funding developments when banks are too slow or put up too many hurdles, such as presales

A private loan can help a business with capital to keep operations going during a rough spotBecause private lenders rely on an ‘exit strategy’ we don’t have to assess the borrower’s serviceability. A short-term fall in cash flow or profitability doesn’t impact our assessment of the application.

If the borrower has a genuine business purpose, sufficient equity in a property and a realistic exit strategy then they are likely to be approved for a loan.

Some of the scenarios that are perfect for a private loan include:

Urgent Funding

When a borrower needs funding urgently and cannot wait the usual 4-6 weeks that a traditional bank loan takes.

Development or Construction Funding

For times when your client needs a first mortgage (Senior) or second mortgage (Mezzanine), draw downs, or completion finance for a development project.

Equity Release

A private loan can assist a borrower who needs to release equity for a business purpose but cannot show serviceability.

ATO Debt Finance

If a business has been denied a payment plan and the ATO has marked their credit file and issued a letter of demand, a short-term facility for 6-12 months at an affordable rate can assist.

Valuation Not Contract Price

When a property is purchased under the market value and needs to settle the transaction, the borrower can borrow against what the property is worth and not what they paid for it. Most banks will only lend the lesser of contract or valuation price. A private lender can lend on the higher valuation rather than the contract price.

Credit Repair

If a borrower is unable to attain traditional finance due to credit issues a private lender may still be able to help if they have real estate with available equity.

Private lenders have always had a focus on business lending and supporting small businesses and this is no different during this period of disruption. Private Mortgages Australia has seen an increase in demand for short-term funds from businesses and developers experiencing difficulties due to Coronavirus and expects to continue to assist SME businesses while government restrictions remain in place. While the Coronavirus crisis has created less than ideal circumstances for businesses and developers there are ways to keep operations going during these tough times.

 

To find out more about our full range of products and solutions, click here.

Need funding? Fill in our Quick App Form and receive an Indicative Letter of Offer within four business hours (based on a 9am – 5pm Melbourne business day) as long as you’ve provided us with all required information.

If you’d like to discuss your scenario then get in touch with:

Shanta Lobo

General Manager – Relationships

1300 856 683

[email protected]

Shanta Lobo