Home – New Forums Starting your journey Cash or bank loan to buy business Reply To: Cash or bank loan to buy business

#1217941
LucasArthur
Participant
  • Total posts: 3,171
Up
0
::
brownbag, post: 262846, member: 112769 wrote:
Thanks Jason. I can’t imagine that we wouldn’t get a loan with our house paid off. The business is very profitable and well known (in our city) already so that will also be very simple.
I like your idea of lending yourself the money. I’ll look into that one a bit more.

No drama, although the credentials of owning a home and the strong cash flow or success of the business appears solid from your comment – these are not the only 2 factors banks consider, sadly.

There is a vast array of things they use to lend against or justify lending applications for business/commercial usage, such as:
– what was the last PAYG of the intended applicant/s
– what is the savings like (owning a home doesnt always equate to an ability to save – eg could be low value property – or you inherited it – or used inheritance to pay off etc etc) –
– applicants experience in the intended industry of purchase
– age of applicants
– business plan and intended projections
– competition
– bad defaults or late payments of anything
– and the list goes on.

Not trying to evoke fear, just being forthright in advice (and i am not an accountant or legal practitioner so please read into as you wish or experience) when it comes to commercial lending…. If you are prepared, objections can be overcome, if you are sideswiped by the process it can take longer to overcome ;)

Cheers

Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888