When it comes to purchasing a new vehicle house or even equipment for your business there are many options on the market on how you can structure your loans. Sometimes when things are too good to be true, they are often are. However, this should be no reason to avoid freeing up your cash-flow by using an independent finance broker to achieve your requirements.
As one of Australia’s leading finance brokers for over 20 years, we’ve put together this informative blog to help you understand the most secure and reliable ways to structure your loan and what to look out for on your next loan agreement.
Starting off these are some of the key parameters that you need to be looking at when you decide to purchase anything using a loan:
- Will the funds be available when needed;
- Are you obtaining funds at the lowest interest rate possible;?
- Eliminate or dilute covenants and or onerous conditions.
- Understanding events of default (what happens if you are unable to meet payments?)
- Allow for the repayment of the loan over a period as long or as short as needed.
- Knowing what documentation to provide to the lender in order to not overexpose yourself.
But what is most important is that is understanding if the loan is secured on unsecured.
This makes a big difference to the security of your loan, the amount of interest you may pay and what happens if you are unable to meet your repayments.
These loans occur when the mortgage/or loan is placed on the chattel (the purchased asset) where if you miss payments for long enough the bank can repossess and take ownership of the vehicle (or asset) and only the asset itself. In most occasions this is the best loan option as it protects you and your business from further retribution.
An unsecured loan is structured similar to cash-flow financing where the money is not secured against any asset (like a vehicle or home). These loans tend to hold higher interest rates, because the lender views this loan as having no asset to lend against.
What to be Careful of:
What is important is that you watch out for (especially if obtaining loans through your bank) is a fixed & floating charge over your business itself. These types of loans mean the bank could have control over not only the asset itself but also your business, properties & other assets not included in the loan. This type of structure means your interest rates could go up at any time and if you are not able to make payments you could be at risk at losing a lot more than your Vehicle.
How Can Finmax Help
As an independent finance broker, we set our own rules around the type of loans we source for our clients, which means we will never put fixed & floating charges on anyone’s business! As one of Australia’s leading independent finance brokers we understand what it means to be a small to medium business and how hard you sometimes must work to grow your business.
Starting from humble beginnings, the team at Finmax are dedicated to helping small businesses to take advantage of opportunities when they arise. As your dedicated finance partner Finmax work with our clients to understand their current needs and the long-term objectives of their business.
With an in-depth knowledge of the vendor finance industry and the support of over 50 underwriters, Finmax are dedicated to finding the best solution for their clients’ needs with ease. Because Finmax know what it means to be a small business owner, they are dedicated to helping their clients navigate the requirements of traditional big-name banks.
This means we can work to gain finance for your organisation even if you have been running for less than two-years, do not have a commercial credit reference or own property, Finmax can still help you gain finance.
Not only do Finmax seek to achieve the best rate for their clients, we can work with your accountant to help realise the tax and GST benefits their clients can gain by choosing to use vendor finance for their vehicles or equipment.
If you are looking for passionate finance vendor that partners with your business for life, Finmax are your ultimate choice. We pride ourselves on truly understanding your situation and having helped over a thousand small businesses grow Finmax are your “get-it-done” vendor finance company that works to save you time and money so you can focus on running your company.
Contact us today for a commitment free consultation or for information on how financing new vehicles & equipment can help grow your business we recommend downloading our informative eBook How to Grow Your Business with New Vehicles & Equipment