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  • #968993
    • Total posts: 2

    Hi all,

    I hope there is someone in this forum can help me. I am a newbie here and glad to have find this forum, there seems to be alot of nice people around this forum.

    Before seeking the banks, I was wondering if someone can give me advise on how banks issues out loan, and if there are different ways approaching the banks for a loan.

    My Scenario:
    I have a business that is very viable (started operating 1 year ago, this is the first financial year) and have been making money during the Decemeber and January period. But due to my business is very weather dependant and seasonal, it has been making a small loss just before the end of financial year.
    Having said that, it will only take me 2 months of good flowing business and it will be back on track. The business is definately viable and I have already secured some contract that will definately make me break-even till the end of the year even in worst case scenarios. Working out my sums and trying to fine tune the business, I find that the land that I am renting is costing me an arm and a leg. It would be more cost effective if I owned the land. I pay double cost in rental whilst i can own my own land.

    The question is, will banks lend me the money to purchase the land? i almost forgot, the land cost 1.5million. My company has been operating over a year, and i have been turning over more than 1 mil.

    What is the best way to approach the bank? I will be presenting them my business plan, but are there any other negotiation method that i should be aware of?

    I am confident with the business, and willing to put everything in, but just lacking the funds.

    your help would be great.



    Warren Cottis
    • Total posts: 807

    Dear Vincent

    360 is about to announce that it has access to finance for all types of lending including asset finance without real estate security.

    Lending rates are driven by the volume of business that you generate for the lenders so you are unlikely to get the best rate that you can get for yourself by going to the banks direct.

    If you would care to go to the 360 Contact Us page and drop me a line then I would be happy to explain to you how you can achieve your goal and you will be under no obligation whatsoever

    If you might wonder how this fits in with the 360 website appearing to be a web design company… the answer is that 360 is really all about complete business improvement and I see the internet platforms as being just some of the tools that you need to build your business

    Alan Maddick
    • Total posts: 410

    I would be engaging a mortgage broker with experience in commercial & business lending. It is not just putting together and negotiating your deal but also knowing which banks are lending in the first place.

    • Total posts: 23

    Hi Vincent

    Banks lending to businesses will be looking for financial statements for at least 2 years to ensure that a business is profitable and has a sufficient steady cashflow to meet any loan repayments.

    Obviously if you are now paying rent they will add this back to ascertain the overall earnings (earnings before interest tax depreciation & amortisation (EBITDA)) however unless you can adequately demonstrate to them that your business is profitable and has sufficient cashflow you may find it difficult.

    What you will need to provide to a lender should include the following;

    Business plan incorporating Profitability & Cashflow forecasts done on a month by month basis for at least a minimum of 12 months
    Details/copies of business contracts held (if any)
    Past Financial statements and tax return/s of the business
    Copies of recent GST (BAS) returns for the business
    Copies of bank account statements for the business
    Details of your own financial position (asset & liabilities)

    Also, banks will generally only lend up to 65% of the purchase price for commercial property and sometimes even less on vacant land and so you will need to have sufficient equity yourself to cover this shortfall plus costs such as stamp duty.

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