Perfect Scenarios for a Private Loan

Perfect Scenarios for a Private LoanAt Private Mortgages Australia, there are a lot of things we do that are different to the traditional bank lenders. Your clients can take advantage of this when they need help with a particular situation.  Let’s look at the scenarios that are perfect for a private loan:

Urgent Funding

This is a common scenario. Your client needs funding urgently and cannot wait the usual 4-6 weeks that a traditional bank loan takes. They need funds within one to two weeks, so need someone who specialises in getting the funds for them with speed. This is a perfect scenario for a private loan.

Read an urgent funding case study here.

Development Funding

For times when your client needs a first mortgage (Senior) or second mortgage (Mezzanine), draw downs,  or completion finance for a development project.  A lot of the banks will not consider completion finance because they do not like lending on incomplete security. This type of private loan particularly assists your clients when something happens towards the end of the project and they need funding to complete it (think budget blow-out).

Read a development funding case study here.

Asset Lending

In this scenario, your client needs to release equity for a business purpose but cannot show serviceability. They want to borrow purely against the value of an asset. A private loan can be made against real estate, where we do not need to look at the client’s income and serviceability.

Read an asset lending case study here. 

ATO Debt Finance

If your client 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.  Banks will not loan funds to anyone who has an ATO debt. We pay out the ATO debt for them, so they have a clear ATO portal. This allows them to go back to the bank and get a traditional loan.

Read an ATO debt finance case study here. 

Valuation Not Contract Price

Your client has purchased a property under the market value and needs to settle the transaction. They want to 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. We can lend on the higher valuation rather than the contract price, which may be lower. Sometimes we have lent more than 100% of the purchase price because we can see that it is worth a lot more (think uplift in value due to a development approval).

Read a valuation not contract price case study here. 

Paying Out Business Partners

Say your client is splitting up a business partnership for example, if one of the partners is retiring, they require funding to pay out that business partner as part of an agreement or settlement. We assist by providing a private loan so they can complete this.

Read a paying out business partners case study here.

Urgent Business Opportunity

Your client has a business opportunity which requires some funding to complete. They may have an opportunity to purchase stock at a discount and need funds quickly to secure the opportunity. Once purchased, the stock can be sold to pay back the loan or they can arrange a more traditional loan, which takes longer to organise.

Read an urgent business opportunity case study here.

Credit Repair

Your client is unable to attain traditional finance due to credit issues. Usually something has happened to cause the issue and your client needs time to work through the issues. The process can be lengthy and they may need access to business finance while their credit file is being repaired.  If they have real estate with available equity, then we may still be able to help. We take into consideration how much we are lending against that asset opposed to how much income the client has.

Read a credit repair case study here.

 

Private Mortgages Australia offers cost-effective loans to small-to-medium businesses that cannot get finance from the banks. Our lending process offers greater flexibility and quicker turnarounds than traditional lenders, so that your clients can get the best solution for achieving their goals.

For further information about private loans for business projects, give us a call on 1800 856 683 or contact us via our website: www.privatemortgagesaustralia.com.au/contact-us/

SMEs with tax debt need to take action

ATO tax debt refinancingOn 22 October 2019, the Government passed law which allows the Australian Taxation Office (ATO) to disclose tax debt information of businesses to registered credit reporting bureaus (CRBs). The law received royal assent on 28 October 2019.

Under the law, the ATO can only disclose tax debt information of a business where certain criteria are met.

The ATO will only disclose tax debt information of a business to a CRB if the business meets all of the following criteria:

  • it has an Australian business number (ABN), and is not an excluded entity
  • it has one or more tax debts, of which at least $100,000 is overdue by more than 90 days
  • it is not effectively engaging with the ATO to manage its tax debt, and
  • the Inspector-General of Taxation is not considering an ongoing complaint about the proposed reporting of the entity’s tax debt information.

The ATO will notify a business in writing if they meet the reporting criteria and give them 28 days to engage with the ATO and take action to avoid having its tax debt information reported.

Many businesses have previously used the ATO like a bank and racked up debts by not paying their commitments on time. This decision could now have adverse effects on credit ratings and credit insurance limits, making it harder to maintain or extend credit terms with suppliers.

There has never been a better time to get your ATO debt in order and set your business up for success in 2020. Private Mortgages Australia is able to help businesses refinance ATO debt and pay out the tax debt with a short-term mortgage. This enables the borrower to pay off the ATO debt and build up a few months of good payment history. The borrower can then try to refinance to a long-term debt and pay off the loan.

For more information about how Private Mortgages Australia can help, read our case study or get in touch via our Contact page.

 

 

Refinancing ATO Debt

Private Mortgages Australia can help refinance ATO debtThe end of the financial year can be a stressful time for lots of people as they try to manage their expenses and get their finances in order before the tax man pays a visit. If a borrower has an outstanding ATO bill and the ATO doesn’t grant an extension then they can be in a bit of strife. While having an ATO debt is not ideal, this doesn’t disqualify them from borrowing money. A traditional bank won’t lend to a borrower with an outstanding ATO debt, however, there are several steps that can be taken to consolidate tax debt in order to get the finance needed.

One way of doing this is to pay out the tax debt with a short-term mortgage. This enables the borrower to pay off the ATO debt and build up a few months of good payment history. The borrower can then try to refinance to a long-term debt and pay off the loan.

One of the major benefits of this option is that the loan comes with pre-paid payments so the business borrower doesn’t need to make payments during the term of the loan and can reinvest profits back into the business to ramp things up or focus additional cash-flow on building that good payment history with their current lender.

Having an ATO debt can be a tricky situation however, with some strategic management of the debt it is possible to get back on track and make it possible to access finance.

 

By Tony Barbone

Managing Director, Private Mortgages Australia