Business Banking & Finance Has anybody had experience with business loans?

Yes the fundamentals are what i have to try to address. Debt servicing is easy with a profitable stable business that has currently 0% leverage. It's just ideal if there was a way to get good rates without personal assets. But I guess everything comes at a price..

 

10-40% p.a, it all comes on the sliding scale of how risk the deal is, whats the assets being purchased (vehicle? New? Kitchen Equipment? Secondhand?) etc. Then you've got the whole realm of operating lease style products which whilst clearly have a higher effective cost, from a tax perspective can be attractive for people looking for finance in a new business.

 

Doing this at the moment, for buyout of some non-working shareholders. Bankwest has the most appetite, and will price around bbsw + 4%. This is directors guarantee and charge over the company basis, no prop security. 80% LVR. Facility size $2.1m between loan and line of credit.

In order to get to the start line for something like this you really need to be able to show record of strong performance, have a good story and 3-5 years forward monthly P&L and cash flows and some other bits and pieces. Don't expect to be as simple as a home loan lend obviously. Using a broker experienced with business lending (not that many around!) very highly recommended.

 

If you are doing cashflow lending the banks will look at the quality of your business and the forecasts you prepare.

You should have a forecast profit and loss, forecast balance sheet and a forecast cashflow that integrates all together.

I think it is better to pay a bit more in interest and keep the personal assets away from the business.

If you are organised and disciplined it is fine - heaps of businesses borrow money.