5 Reasons Why Accountants Should Consider Working with Private Lenders
As an accountant, you play a crucial role in the financial success of your business clients. You help them keep track of their expenses, manage their taxes, and provide valuable insights on how to make their financial decisions. One area you may not have considered is helping your SME clients access finance when they’re having difficulties with funding from the banks. This is where Private Mortgages Australia comes in.
Challenges Businesses Face in Getting Bank Finance
By default, most business owners turn to traditional institutions like banks to get their financing. But according to a global survey conducted by Mambu in 2022, half of SMEs in Australia and New Zealand were unable to secure sufficient or any funding.
Have a scenario you want to discuss?
- Submit a quick app form
- Response time in just 4 business hours.
- We'll gladly assist you and let you know if we can be of help.
The reason for this is that traditional institutions follow strict and rigid serviceability requirements to make sure that a borrower, in this case a business, is able to make monthly payments towards the loan.
Unfortunately, this “one-size fits all” approach is unable to accommodate businesses who don’t fall within the ‘big bank box’. Many businesses have ‘lumpy’ cashflow so find it difficult to prove they can service a loan, or others are starting a new business and don’t have two years worth of financials that a bank requires.
This is where working with a private lender becomes a huge advantage for accountants in helping their business clients find the financing they need to operate and grow their business. Whenever banks say “no”, there will always be alternative solutions available.
Private Loans for Business
A private loan is a loan that is provided by private lenders rather than traditional banks or financial institutions. The popularity of private loans has grown in recent years due to the numerous benefits they offer to businesses. Here are some of the key reasons why accountants should recommend private loans to their clients.
- Flexible terms: One of the biggest advantages of private loans is their flexibility. Unlike traditional bank loans, private loans can be structured to meet the specific needs of a business. For example, rather than focusing on serviceability requirements, private lenders may focus more on exit strategy when it comes to the repayment of the loan. This flexibility makes it easier for businesses to find a loan that fits their unique financial situation and helps them get the financing they need to grow and succeed.
Faster approval and funding: The loan approval process for private loans is typically faster and less bureaucratic than that of traditional bank loans. At PMA, our response time for applications is within 4 business hours. And upon receipt of all required documents, we can settle within 5 business days. This means that businesses can access the financing they need more quickly, which can be critical for companies that need to take advantage of new opportunities or cover unexpected expenses.- Not about credit history: Since private lenders focus more on the value of a security property and exit strategy rather than a businesses credit history, business owners with poor credit can still secure funding. This makes private loans a great option for businesses that may have trouble securing a loan from a traditional lender due to their credit history or financial situation.
- Shorter loan terms: One of the criticisms levied at private business loans is that they charge higher interest rates than traditional bank loans. However, with some SME clients using personal lines of credit from unsecured lenders or even credit cards to support business cash flow requirements, a secured short term loan can be a cost effective outcome which allows the loan term to be matched with the funding requirement.
- Greater control: When a business takes out a private loan, they have more control over the terms and conditions of the loan than they would with a traditional bank loan. This can be especially important for businesses that want to ensure that their loan is structured in a way that meets their unique needs.
Role of accountants
It’s important for accountants to carefully consider their clients’ financial needs and goals before seeking out a private loan. This will help ensure that the loan is a good fit for the business and that it will provide the financing necessary to achieve their desired business goals.
By recommending private loans, accountants can play a key role in helping their business clients achieve financial success and stability. With the right loan and the right repayment terms, businesses can achieve their goals and achieve their full potential.
About PMA
Private Mortgages Australia offers short-term, flexible loans to business clients and property developers. Our credit team is readily available to accommodate brokers and borrowers alike.
We pride ourselves on our quick response time. We can also provide generous referrer fees within 1 day of a loan settling with no clawbacks!
If you are an accountant and have a business lending scenario you would like to discuss, feel free to contact us or you can complete our Quick App form here (< 10 mins).
Free Guide: Build A Better Brokerage
Download PMA’s Referrer Pack
I want to get started now
Have a scenario you'd like to discuss?
Contact Private Mortgages Australia:
Or, you can submit a Quick App Form on our website and we'll get back to you.
