First and Second Mortgages & Caveat Loans
Caveat Loans or First Mortgage loans are fast settling short term loans which are generally for a period of between 1 to 24 Months. They are asset based loans and are secured against real estate (usually a house, commercial property or residential or industrial land) Caveat Loans are available to clients who wish to retain their existing 1st mortgage but require a short term line of funding beyond their current credit provider’s capacity.
A Second Mortgage is a loan secured against a property that already has a First Mortgage attached to it. You will still have your original lender on the title of your property and the second mortgage ranks after this.
Loan Amounts for Caveat Loans or Second Mortgages start at $10,000
First Mortgage loan amounts start at $20,000
For our Caveat Loan or Second Mortgage products the Maximum Lvr is Usually 70 - 75% but on a case by case basis some lenders will accept 80% Lvr. The loan term is usually between 1- 24 months.
For First Mortgages the Maximum Lvr is usually in the 65 - 75% range. The loan term is usually 1 - 24 months.
UNSECURED BUSINESS LOANS
An unsecured business loan is a loan that requires no collateral and utilises a financial product that lends against the cash flow of your business.
HOW QUICKLY CAN I RECEIVE FUNDING ?
Funding can be as quick as 1 to 2 business days but is dependent on how quickly all supporting documentation and information is provided when requested.
DO I HAVE TO PROVIDE SECURITY FOR THE LOAN ?
No Collateral or Security is required and your application is assessed on your revenue. Loan approvals to small businesses are based on business fundamentals like cash flow, not based on the value of business assets.
HOW DOES THE REPAYMENT PROCESS WORK ?
For Ease, Automatic Daily or Weekly Fixed payments are set up so there are no large end of month due dates.
WHAT IS THE MINIMUM QUALIFYING CRITERIA FOR AN UNSECURED BUSINESS LOAN ?
Your business should be trading for at least 6 months and have minimum turnover/sales of $5000 per month.
WHAT DOCUMENTATION IS REQUIRED FOR THE LOAN ?
For loans of 50k or less we usually require a Completed loan application, Drivers Licence and 3-6 months business bank statements.
For loans over 50k to 600k we usually require a Completed loan application, Drivers Licence and 3-12 months business bank statements and recent P and L Financials and Current Receivables etc.
WHAT IS THE TERM OF THE LOAN ?
The term of the loan is usually between 3 and 24 months.
WHAT IS THE INTEREST RATE ON THE LOAN ?
The cost of the loan is determined during the credit assessment after which you will be advised of how much you can borrow, repayments, any fees and interest. The interest rate for an unsecured business loan depends on the strength of the business, the experience of the owner, and the business's operating cash flow.
ASSET/ EQUIPMENT FINANCE
If you are the owner of a small to medium (SME) business you would probably be aware of the difficulties in securing finance from traditional lenders to expand purchase or update your assets/equipment.
Equipment Finance is secured against the asset you’re financing and allows you to spread the cost of the asset over its expected lifespan.
We can assist with Hospitality Finance for Cafes, Restaurants, Hotels and Bars.
We can assist with Plant and Equipment Finance for vehicles,trucks, trailers, machinery, IT Systems and medical equipment etc. The most common types of asset finance are leasing , hire purchase and chattel mortgages.
Leasing options include Finance Leases and Operating Leases. With a Finance Lease your business woould take on both the risks and benefits of owning the asset. Operating leases are suitable for assets that can become obsolete quickly like computers and IT Systems/Equipment.
With Hire Purchase the financier owns the car or equipment for the duration of the Hire Purchase Agreement but the title transfers to you after the final payment or you have the option to purchase it at any time.
A Chattel Mortgage is where the lender provides the funds for you the purchase the asset and you take ownership at the time of purchase. The lender will take a mortgage over the asset and ownership will transfer to you once the mortgage is paid out.
INVOICE FINANCE
Invoice Finance also known as Debtor Finance allows you to turn your unpaid sales invoices into cash. Some lenders will allow you to access up to 95% ( this varies between 80% to 95% apprx) of your unpaid invoices.
Invoice financing is a type of business loan with reduced risk, as it is secured by outstanding invoices. Unlike other types of business funding, there are no real estate / asset requirements and finance is limited to the size of the invoices. Facility limits can range from $10K to $150M to support every business size and is perfect for businesses offering payment terms to their debtors or where the business has seasonal variations in sales.
Commercial Property Loans
A Commercial Loan uses commercial property or land as security for the amount being borrowed. Most commonly commercial loans are used to buy commercial or industrial property, fund business operations or to acquire business equipment.
Commercial Property Loans can be used to purchase retail, office and industrial property for investors and owner occupiers. We can also assist with Development Financing for retail and industrial/Factory units.
The Max LVR is usually 75% but we have lenders that will go up to 80% on a case by case basis. We can also assist with refinancing at competitive interest rates and terms. Loan size starts from $20,000 to $50 million
Commercial Private Loans come with less scrutiny and can also be facilitated and require less paperwork and can be settled quickly.
Commercial Property Loans can be used to acquire ----
- Office Buildings
- Shopping Centres
- Factories / Industrial
- Retail Shops
- Warehouses
- Commercial / Industrial Land
- Development Sites
Development & Construction Finance
BusinessCapital.com.au can assist with Development Funding by sourcing both traditional finance as well as private construction funding. The most commonly used method for projects is Gross Realisable Value Funding (GRV Funding) where the mortgage facilities look at the projected end value of the project and will extend funding to a percentage of that. The maximum GRV is usually 65% but can sometimes stretch to 70%. This type of facility is designed to reduce the borrowers investment in the project. BusinessCapital.com.au has access to non-bank and private lenders that do not normally require pre sales and can look at a project from a different angle than the major banks.
The other approach to financing is using the traditional hard cost or total development cost (TDC) method. which is simply the total cost of your property development project. Some lenders may also be prepared to lend up to a higher % of the TDC than others ( between 80-90% ). The higher the TDC % means you need less equity or deposit for your project.
Construction or Development funding is used by developers to build or construct their development project. This process may also include refinancing any existing debt on the land as part of the funding process. Construction finance can be used for the following scenarios --
- Townhouse Developments
- Apartment Developments
- Unit Developments
- Mixed used Projects
- Commercial Projects
Whether you’re a business owner, investor or property developer you need to move fast in today’s market. By dealing with BusinessCapital.com.au you’ll have the confidence to commit and the means to act quickly so you don’t miss the opportunity presented to you. Call us on 1300 100 500 or use our Express Enquiry Form.
