Benefits of Commercial Funding

Financing your business with one of the many different products available across Australia’s commercial lending market is less about borrowing money, and more about making an investment in your business success.

Whether you’re starting up, sustaining success, or wanting to make the most of new opportunities, the right finance can help fund the growth you’re looking for.

Australia is indeed the lucky country. We are blessed for choice when it comes to the amount of competition that exists when it comes to the business finance market.

With so many lenders, and so many products under each of their brands, it’s important you make the most of this choice when it comes to who and what you choose when it comes to how to fund your business.


Reasons to borrow for business.

There are many ways the right finance can help contribute to your business growth.

You’re looking to expand.

It’s not just about larger premises or new property. Expansion can mean new equipment, more staff, marketing, or diversifying your business into other areas. When conditions are right, and opportunities present themselves, finance can help realise these opportunities.

You need new equipment.

This is one of the most common reasons to get finance, an equipment or vehicle loan can be structured to preserve cash flow and also leverage any tax benefits your accountant or tax adviser may suggest. And because the equipment is the security, you may not need to use other assets, either personal or business, as collateral.

Getting your inventory right.

Having enough stock on the floor when you know you’re about to get busy can be tricky. You may need to buy your inventory before you get a chance to sell it. Having the right finance means you’ll be ready to make the most of new trends and seasonal demands.

Keeping the cash flowing.

Cash flow is vital for any business. There are finance products that can be used to give you capital or equipment to grow, while maintaining the funds you need to meet your day-to-day expenses.

It’s time to refinance.

Business lending can be a highly competitive market, with new products and lenders entering the market all the time. This means you can make the most of these new options to obtain finance that simply suits your needs more or offers more competitive terms or structures that better match your business.


Commercial funding – how does it all work?

Given our strong lender relationships we also know how lenders work, what they look for and what they need from you.

How does the lender assess a loan application and interest rates?

Commercial lending is assessed on a number of different components. Whilst serviceability is key, the risk assessment includes value and type of security (such as residential, commercial, industrial, specialised and alike); industry type; management experience; age of business; purpose of funds; financial ratios, margins, profitability and trend analysis; bank account performance and credit history; and business cash flow.

Lenders assess serviceability or repayment capacity slightly differently. Some will require up to the past three years of tax based financial statements whilst at the other end of the spectrum some will rely on management accounts or even your last BAS statement. In some cases, a cash flow forecast complete with assumptions will be required. They will assess strength of your business to withstand interest rate movements, trading fluctuations and ability to meet principal and interest payments even if your loan is interest only.

One thing for certain, lenders treat ability to repay as paramount in their assessment process. And whilst they hold the ultimate decision whether to approve or not, the most important party in this finance application is you, the borrower – it is important you are comfortable with the ability of your business to meet the financial commitment you are entering.

It should also be noted commercial lenders differ greatly in their risk appetite – some specialise in industry or security types while others exclude certain sectors entirely. Understanding these differences (which are dynamic) is crucial in deciding where to place your finance application. A poor alignment between your needs, your business ‘risk profile’ and the risk appetite of a lender is not ideal for your future business growth and success.

How are interest rates assessed and what type of fees are applicable?

Interest rates are extremely competitive amongst lenders and generally the lower the assessed risk, the lower the interest rate, and similarly with value of security offered and comprehensiveness of supporting financial data.

Lenders will charge up-front fees such as a Loan Approval fee, on-going loan administration fees, and/or limit line fees, and set-up costs such as valuation fees and government duties, and quite often legal costs, documentation preparation cost and settlement fees.

Why use a broker?

You’re busy running a business. It can be so hard to find the time, yet it’s so important to get it right.

The right finance can help you fuel growth and help build a strong and successful business. Get it wrong and the debt can often have the opposite effect. You don’t want your earnings being exhausted by your repayments, instead of providing you with the cash you need to operate successfully.

In business, the right finance is so much more than just finding the lowest interest rate and reducing fees. Not only do you need the right type of finance, but you also need to be able to choose from the widest range of options, terms and structure. Needless to say, there are a lot of complexities. It can be a difficult area to navigate, and to have the confidence to know you’ve made the right choice.

That’s why using a broker like us is a smart decision. We will match the right business loan to your business needs.

We have access to a range of business loan options from a variety of lenders. This means we can help find the right loan for your business and give you the peace of mind that like all good business decisions you’ve explored the options before making the final call.

We get to know you.

Before identifying the right type of finance product to suit your goals, we will get to know you and your business. Once we’ve identified what you want, we will source the most suitable loan and negotiate across our lending panel to get to the right deal that works for you and what you’re looking to achieve.

The latest choices.

We have access to a variety of different lenders with a choice of loan products. Because we deal with lenders day in and day out, we stay up to date with changes in the market and the latest business loans.

Get more from the banks.

We know how the lenders work and what they are looking for when it comes to their lending appetites. You may be surprised to hear they all have different lending objectives, parameters and processes; they all operate differently. We will help to structure your proposal, taking into account the various product types, interest rates and fee structures. And because we stay on top of changes in the lending market.  We get a sense of lenders’ attitudes toward a particular industry or sector. If a lender’s policy or funding appetite changes in your industry, we can also help you consider appropriate strategies to ensure it is business as usual.

A fast turnaround.

Our understanding of how your finance is structured and the criteria lenders use to assess applications, means we can help ensure the process is as quick and hassle-free as possible.

From application to approval.

We will prepare the funding submission, and we will work with the lender to obtain the most appropriate loan package including structure, terms, rates and fees. We will then manage the whole process through to settlement.

All this to give you the peace of mind your business has the right funding in place and leaving you to get on to do what you do best – growing your business.

Get in contact with the team at Provide Finance today to discuss how we can help you with all your finance needs.