Business Finance Broker in Rockingham Provides Road Map to Maximising Business Loans
Announcement posted by Smartline Rockingham 16 Apr 2015
Business finance broker from Smartline Rockingham reveals why so many business loans are turned down and how to get them approved.
Rockingham, WA, 16 April 2015 - Business finance can be difficult to obtain for many, so a business finance broker at Smartline Rockingham decided it would be helpful to consumers to explain why. Recently, Smartline Rockingham Principal Broker Justin Smith revealed some “tricks of the trade” on his company’s blog. Mr Smith feels that business owners need to know exactly what lenders are looking for and how to provide it for them.
According to Mr Smith: “Lenders are taking a big risk when they write a business loan. They want to make sure that the borrower can repay the entire loan. They also want to know they can recoup their investment if the business is unable to make repayments or goes under. Most loan applications are turned down because the business owner failed to convince the bank that they represented an acceptable risk.”
Mr Smith added: “There is nothing more frustrating for the business owner or for a business finance broker than to see someone who has a solid business be denied a loan because they didn’t present their application in a professional enough manner to be deemed an acceptable risk. I thought it would be helpful to teach business owners who are on solid ground how to let lenders know that they are reliable and don’t represent an unacceptable risk.”
What Lenders Look For
When looking over a loan application, lenders feel that some factors are essential and that the absence of any of those factors is a “deal-breaker.” They create a “risk profile” based on three main risk factors: security, cash flow risk and business risk.
Security: Security refers to the assets or collateral that a business can provide to ensure that they can recover their investment if the business is unable to pay the loan.
Cash flow risk: Cash flow risk refers to the ability to make repayments in a timely manner and on a regular schedule.
Business risk: Business risk refers to the ability to sustain a profitable business long enough to complete the repayment schedule on the loan.
All of these main factors have sub-factors. The lender will pay close attention to your bottom line: revenue, expenses and profit. They also pay close attention to projected revenue and plans for sustaining and growing the business.
What Constitutes Risk?
Certain characteristics and factors are perceived as having inherently high risk. Start up businesses in particular are seen as extremely high risk, since so many fail. A lack of collateral is also seen as a high risk. The business sector and the competition in that sector are also important to lenders. Barriers to entry are also important, as are current economic conditions.
Mr Smith concluded: “To obtain financing, it is important for a business to be on solid footing. It is even more important to be able to provide a solid business plan and a low risk profile.”
Smartline Rockingham brokers business finance, home loans and personal loans in the Rockingham area. They have served the Rockingham area since 1999. To learn more about maximising business loans or for an obligation-free initial consult, call 1300 958 730 or visit their website: http://www.mortgagebrokersrockingham.com.au/.
According to Mr Smith: “Lenders are taking a big risk when they write a business loan. They want to make sure that the borrower can repay the entire loan. They also want to know they can recoup their investment if the business is unable to make repayments or goes under. Most loan applications are turned down because the business owner failed to convince the bank that they represented an acceptable risk.”
Mr Smith added: “There is nothing more frustrating for the business owner or for a business finance broker than to see someone who has a solid business be denied a loan because they didn’t present their application in a professional enough manner to be deemed an acceptable risk. I thought it would be helpful to teach business owners who are on solid ground how to let lenders know that they are reliable and don’t represent an unacceptable risk.”
What Lenders Look For
When looking over a loan application, lenders feel that some factors are essential and that the absence of any of those factors is a “deal-breaker.” They create a “risk profile” based on three main risk factors: security, cash flow risk and business risk.
Security: Security refers to the assets or collateral that a business can provide to ensure that they can recover their investment if the business is unable to pay the loan.
Cash flow risk: Cash flow risk refers to the ability to make repayments in a timely manner and on a regular schedule.
Business risk: Business risk refers to the ability to sustain a profitable business long enough to complete the repayment schedule on the loan.
All of these main factors have sub-factors. The lender will pay close attention to your bottom line: revenue, expenses and profit. They also pay close attention to projected revenue and plans for sustaining and growing the business.
What Constitutes Risk?
Certain characteristics and factors are perceived as having inherently high risk. Start up businesses in particular are seen as extremely high risk, since so many fail. A lack of collateral is also seen as a high risk. The business sector and the competition in that sector are also important to lenders. Barriers to entry are also important, as are current economic conditions.
Mr Smith concluded: “To obtain financing, it is important for a business to be on solid footing. It is even more important to be able to provide a solid business plan and a low risk profile.”
Smartline Rockingham brokers business finance, home loans and personal loans in the Rockingham area. They have served the Rockingham area since 1999. To learn more about maximising business loans or for an obligation-free initial consult, call 1300 958 730 or visit their website: http://www.mortgagebrokersrockingham.com.au/.