Home Forums Starting your journey Business Loans with no assets

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  • #999638
    jmark
    Member
    • Total posts: 3

    Hi everyone,

    Hoping I can hear some stories on journeys with start ups on how your business got up and running from little to no money and no assets

    I am looking to start my own real estate property management agency however wondering if banks or any financial institutions will lend with no assets or starting funds

    I have a business plan and hope to purchase a rent roll but nervous to start applying for loans etc due to the above

    Look forward to hearing if anyone else’s journeys who are similar
    Thank you

    Jay

    Further amended:

    I have been in property management for the past 9 years, I am currently a Senior Property Manager and have held this senior position for the past 3 years.

    I would love to grow a business organically however for me a purchase of a small rent roll would be ideal to give me a base to grow off.

    I am a very business minded person, I spent a lot of time working outside of normal business hours, I pride myself on giving and customer satisfaction so for me starting my own business with the procedures and policies I like to live by is ideal

    With working so hard doing what I do putting the long hours in and am financially no better off so starting my own business and being able to work as hard as I want and be financially rewarded for that is also a motivator

    #1220581
    Jason Ramage
    Participant
    • Total posts: 3,165

    Hi Jay

    Before you go gathering stories, maybe a little more about you, your history and your journey so far and why opting to buy a rent roll etc…

    Also, a quick search of the forum will disclose a few replies from people seeking finance with little to no money and ways to entertain this, or not to…

    Look forward to learning more.

    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888
    #1220582
    jmark
    Member
    • Total posts: 3
    LucasArthur, post: 266370, member: 34537 wrote:
    Hi Jay

    Before you go gathering stories, maybe a little more about you, your history and your journey so far and why opting to buy a rent roll etc…

    Also, a quick search of the forum will disclose a few replies from people seeking finance with little to know money and ways to entertain this, or not to…

    Look forward to learning more.

    Jason

    Thanks Jason, I have amended

    #1220583
    bb1
    Participant
    • Total posts: 4,485

    You say you have no assets and no money.

    So if you were the bank manager, based on the information you have provided above, would you give someone money?

    I for one can see some big red flags beside the fact you have no money or assets, but what do you think.

    #1220584
    jmark
    Member
    • Total posts: 3
    bb1, post: 266373, member: 53375 wrote:
    You say you have no assets and no money.

    So if you were the bank manager, based on the information you have provided above, would you give someone money?

    I for one can see some big red flags beside the fact you have no money or assets, but what do you think.
    I have a business plan and experience, the rent roll brings in money, so it’s like buying any business? I’ve been lent $20,000 not secured in the past for other things which I paid back earlier than needed so yes I know banks lend money to people without assets or money. Either way I am looking for comments from people who have similar experience gaining funding from little to no money for business purposes. It’s not like I’m asking for money to start something from scratch I would be purchasing an established rent roll which brings in income.

    #1220585
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,193

    [USER=34537]@LucasArthur[/USER] is a former banker – he has the experience to give you insight if you are able to answer his questions.

    #1220586
    Johny
    Member
    • Total posts: 840

    It has been a long time since I did business lending for a bank, but my general answer would have been NO.

    Of the couple times I did it, they had a very compelling story and history. In one case they were seeking to borrow to repay a private loan. No assets, but a work ethic that had turned around a restaurant completely and had already repaid part of the private loan.. Even then my first attempt in getting it approved failed and I needed a further 6 months of trading results to convince the powers that be. But this was based on them already running the business successfully.

    As for rent rolls, don’t know the current loan to value ratios, but back in the day it wasn’t much. From personal experience I had someone look after an investment property for me. They always advised against putting up the rent so I assume they did this with their other customers as well. They went bankrupt .

    If you were lent money previously, was it personal or business related. Much easier to get that loan when it is being offset against a salary, rather than projections.

    #1220587
    James Millar
    Participant
    • Total posts: 1,704

    Rent roll finance is one of those fortunate few business types where the banks will often lend against the business rather than secured against real estate. So you might in luck. Banks call these products “industry solutions” so check out google and you will find support. A quick check

    https://www.nab.com.au/business/industry/other-industries/real-estate

    https://www.homeloanexperts.com.au/commercial-property-loan/rent-roll-finance/

    https://www.westpac.com.au/business-banking/industries/real-estate/

    I think the valuation is a multiple of total revenue (might be 2.5x management fees) and banks will generally lend a certain % of that – say something like 60%. So you will need some other funds to bring to the table.

    Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900
    #1220588
    businesstrade
    Participant
    • Total posts: 210

    You will need some sort of deposit regardless of whether or not you’re asset backed.

    If you don’t have a deposit, I can’t imagine a mainstream bank to provide lending as they are generally risk averse.

    #1220589
    Michael Tails
    Member
    • Total posts: 6
    JamesMillar, post: 266383, member: 5318 wrote:
    Rent roll finance is one of those fortunate few business types where the banks will often lend against the business rather than secured against real estate. So you might in luck. Banks call these products “industry solutions” so check out google and you will find support. A quick check

    https://www.nab.com.au/business/industry/other-industries/real-estate

    https://www.homeloanexperts.com.au/commercial-property-loan/rent-roll-finance/

    https://www.westpac.com.au/business-banking/industries/real-estate/

    I think the valuation is a multiple of total revenue (might be 2.5x management fees) and banks will generally lend a certain % of that – say something like 60%. So you will need some other funds to bring to the table.

    Hi James, you mention above those links to NAB which refer to real estate loans. Is there something similar for a business loan.

    Michael

    #1220590
    James Millar
    Participant
    • Total posts: 1,704
    Michael Tails, post: 266577, member: 115364 wrote:
    Hi James, you mention above those links to NAB which refer to real estate loans. Is there something similar for a business loan.

    Michael

    They are business loans made to borrowers in the real estate industry not loans to buy real estate. Most banks have a few select industries that they deem safe enough to lend directly against certain business assets. These specialisations are often called “industry solutions”.

    Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900
    #1230805
    Anonymous
    Inactive
    • Total posts: 1

    It is feasible to obtain a business loan with no assets, but you must first consider your business finance choices and overall position!

    #1230873
    Blank
    Participant
    • Total posts: 41

    I once lent a guy about $10 unsecured personal loan to start a business, it was a small retail shop selling milshakes/smoothies. I cant remember how much of his own money he put it, he had already spent it before borrowing the money.

    Why did I approve this?
    Because he was a long term customer of the branch, and had a successfull track record of small retail start ups like this. He always sold them after establishing the business for one season (holiday town). when he was done he would just retire again until his money run out.

    There is two key points in my approval that stand out as the fundamental reasons for approving, if anyone recognises them immediately you are wise. If he didnt have both, he would not have got in my door.

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