Business Finance Unsecured
Finally there is a product on the market for SME’s that suits just about any business purpose and is truly unsecured.
Some of the parameters of the loans are:
- Amounts: $5,000 to $250,000 (ask about how we can structure higher amounts using cash-flow)
- Terms: 3 months to 12 Months
- Minimum Criteria: $60,000 annual turnover and minimum 12 months in business
- Supporting Documents under $50,000 : 1 page application form, Photo ID and 3 months bank statements
- Supporting Documents over $50,000 : as above and Financials for 12 months plus Aged Payables and Receivables.
Examples of Loans:
- $100,000 over 6 months to start a new contract and pay suppliers and subcontractors
- $25,000 over 7 months to pay wages due to invoices being uncollected
- $150,000 ver 6 months to purchase and stock up on inventory
- $200,000 over 9 months to expand into two more stores
- $10,000 over 7 months to upgrade new cool room
The immediate question from clients is ”How much does it cost?”
First, if the opportunity is good enough, then the costs of this type of lending is likely to be more than affordable and will increase the clients profits now and in the future. Imagine an expansion that is paid off in 6 months but keeps returning profits for years after.
These short term loans are provided on a ‘factor rate’. Instead of applying an annual interest rate, a factor rate is applied to the amount borrowed based on the loan amount and the term. The factor rate for these loans ranges from 1.15 to 1.4. This means that a loan of say $10,000 may have repayments of between $11,500 and $14,000 depending on the credit quality and the term of the loan. This factor rate includes all fees and charges, so there are no surprise ‘account keeping fees’ or ‘exit fees’.
Repayments are taken daily or weekly from the clients sales providing them with a program that is aligned to their sales which moves up and down. This way, the client is paying smaller repayments more often so the amount is not such a large impost on their account.