What are their options?
Let's look at the securities they can offer a lender.
First and foremost there is property security, residential commercial or leasehold; next we have the assets of business stock, and debtor's goodwill.
Do you know how much can be borrowed against each of these securities?
Residential – 80 per cent of the value; any amount although serviceability documentation is essential
Commercial – 80 per cent of the value; on a low doc basis (only latest BAS statement is essential)
A loan up to $1 million can be approved from 1 latest BAS statement. The alternative is providing the last 2 years tax returns, business and private bank statements — usually for hotels and motels; 50 per cent of value
Debtors – up to 80 per cent of the value of the invoices
Stock – 20-40 per cent depending on saleability
Goodwill (unsecured) –up to 50 per cent of purchase price.
What do you need to supply to the lender in order to get your business loan?
Besides the financial information, latest BAC etc, you will need two additional items: a business plan outlining your strategy to grow the business; and a 12-month financial projection outlining the anticipated income less the expenses resulting hopefully in a profit.
Remember, the road to success is always under construction.
