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A lot of people think mortgage brokers just do home loans…
At Long Property, a lot of our clients are self employed, and that has meant approximately 30% of our business has moved into the business finance, or commercial finance space now. (approx. 70% remains standard residential)
However just because you’re self employed, it doesn’t mean your finance goes down a business banking path. It’s more to do with the ‘purpose’ of what you’re seeking the funds for… if you’re looking to buy a commercial premises, or if you need expansion capital or working capital for your business, that’s then when it would definitely be relevant.
Today on the podcast we discuss business banking, and we use a mock example of a restaurant owner looking to start a second restaurant, to explain the key points.
The key items we cover off on are as follows:
• Major banks vs. non major banks – who might be the more relevant funding source, and why?
• Where do the new fintech/ third-tier lenders like OnDeck, Moula, Prospa, GetCapital etc. fit into the SME lending space?
• What is a secured vs. unsecured commercial lend, and how does this impact the proposed deal?
• What kinds of loan ratios are achievable?
• How long does the process take?
• How do the typical loan terms and interest rates work?
If there’s one thing you can takeaway from this episode, it’s that when it comes to business/ commercial finance – everything is ‘negotiable’.
For this reason, it pays to have a trusted and experienced adviser on side. They can save you a lot of money, and they can help you negotiate terms more suitable to your specific business requirements.
Before taking on business finance, it’s also important to understand how your personal credit profile and personal borrowing capacities may be affected. This would be important if say you were taking on finance now to grow your business, but then you were also planning to buy a family home later in the year – you wouldn’t want those plans adversely affected.
As always, thanks for tuning in… and enjoy the show!
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If you have specific questions for myself or Patrick you can email hi@longproperty.com.au and we’ll respond within 24 hrs.
If you like this episode you can subscribe to the Long Property Show here.
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The Long Property Show provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. Nothing in the Long Property Show constitutes legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.
