"When the speed of finance is critical"

Author: Michael Royal

?Contact number: 0411 190 474

Email address: [email protected]

Book a chat: https://calendly.com/michael-royal/linkedin-chat

Here are 5 case studies (+ a bonus product release!) for smaller ‘quick turnaround’ loans supported by a director’s guarantee and an All Personal and After-acquired Property (All PAP) General Security Agreement (GSA) which has been registered on the Personal Property Securities Register (PPSR) – now that’s a lot of acronyms!!! No property security or specific asset security was required. The lenders in each case were non-bank lenders. Some of these lenders deal exclusively with businesses providing non-property secured loans (i.e. director’s guarantees and an All PAP GSA) whilst others look after businesses and employees with property and non-property security.

Case Study #1: Beauty Wholesaler expanded then cashflow dip

After rapid expansion (including a renovation and re-fit), a beauty wholesaler was looking at a larger-than-anticipated dip in her cash flow.

A non-bank lender was able to provide a revolving facility that could be used in the short-term, as well as being available for any future requirements.

Within 3 hours, this lender had approved a $100K cash facility, and within a further 3 hours, the business owner had drawn down on the facility to get on top of supplier invoices and utility bills.  

Case Study #2: Engineering firm looking to fill new orders

With a few new jobs on the horizon, a civil engineering firm was looking for some extra working capital to support upfront sub-contractor payments and equipment rental.

Within 2 hours, a non-bank lender had approved a $15K cash facility. And, with the revolving feature of the facility, they can access additional funds as they are repaid - meaning no ongoing re-applications or assessments.

Case Study #3: Manufacturer/steel fabricator needed working capital support after Covid

A 6-year-old business with a $7M turnover business was struggling to get moving again after Covid. It had orders in the pipeline but not sufficient working capital to fund the purchases required to fulfill these orders. Plus, it had an upcoming R&D grant but this was still a few months away.

After due diligence of the forecast cash flows and assumptions with the financial advisors, the solution offered by the lender was a $300K 24 months amortizing unsecured loan facility.

This loan was settled within 5 days of submission.

Case Study #4: Premises renovations for the disability accommodation provider

Within 48 hours, a term loan for $25K to be repaid over 18 months was organized based upon bank statements with security limited to the director's personal guarantee (i.e. no All PAP GSA).

Case Study #5: Construction with

Plus one more! New Product Release

A non-bank lender is offering low doc facilities between $50K and $250K for businesses with a turnover of more than $700K pa (loan size maximum approximates 1-month revenue). Turnaround time is 1 to 2 days with 120-day repayment terms.

Our comment

Whilst these loans don’t come with the low-interest rates you associate with property-secured lending, the speed of delivery and the quick nature of the due diligence for the amount required can make these loans an appealing solution - particularly if the alternative is you either can’t take on the additional work or you can’t pay your bills because you don’t have the cash to fund your required working capital. As with all loans, doing a cost-benefit analysis of return Vs cost is important. 

In closing 

These lenders tend to offer a facility limit equivalent to up to 150% of monthly turnover (based upon the last 3 months turnover – but Covid exceptions may be considered)

Your next Step

If you would like to have a chat about your situation and how we might be able to help you, book a time which suits you: https://calendly.com/michael-royal/linkedin-chat; or ring me, Michael Royal, on 0411 190 474. We have access to a large number of lenders and we always look to obtain the most suitable loan for you and your business!

Disclaimer

The information contained in this article is of a general nature and does not take into account your personal needs and requirements. It does not constitute financial advice. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. You should always seek professional advice in relation to your individual circumstances. Lender policy, term and conditions, fees and charges apply.