04 May Private Lending – Supporting Australian Small Business
Wow, 2020 hey? It’s been a doozy.
It’s only just gone May and so far we’ve had bushfires wreak havoc, the icon that is was Holden close down and now the ‘rona is working its way across the globe.
Good thing we’re a stubborn lot. You know the type, the ones who don’t back down, who lend a hand, who prop each other up when the going gets tough.
(I’m very conscious that I’m starting to sound like a VB ad…..).
Now, as we face something majority of us have never faced before, we are learning more about ourselves, our limits and our abilities. And it’s a good thing.
Though the impact of, well, 2020, is still hitting home, we have seen a positive response from Government by way of the stimulus packages on offer, support from the Australian Banking Association regarding loan repayments, fee waivers and genuine assistance for those in hardship. We are moving into what appears to be a phase of cautious, careful and considered optimism.
This past weekend has seen restrictions lift slightly. We are able to travel a little further from home, socialise somewhat and shop for non-essential items. It can’t be glossed over that the impact to date on Australian small businesses has been huge.
While we adjust to this ‘new normal’ it’s important to realise that not everyone is eligible for the Government’s stimulus packages or for assistance from the banks with rates/fees/hardship etc. For many of these businesses they have also lost their ability to trade due to the restrictions placed on their clientele.
We’d like to assure you, we are here to help.
Funds to see you through.
The financial needs of an SME during a crisis are varied but generally it is the necessity for short-term support until things get back to normal. Requirements can include:
- general working capital to keep the doors open and the business operating
- retention of employees
- purchase of assets
- meeting regular payment requirements
- funding opportunities as they arise
Because private lending relies on the ‘exit strategy’, serviceability isn’t a requirement. Don’t be concerned if your tax returns aren’t up to date, financials aren’t current or there has been a drop in sales – we can still work with you to source a solution.
Funding requirements over $250,000.
Part of the Government stimulus measures are new business loans available to Australian small businesses affected by the pandemic. Under the recently announced Coronavirus SME Guarantee Scheme, loans of up to $250k are available to eligible Australian SME’s. These loans are unsecured with terms of up to three years, with no repayments required for the initial six months.
Any businesses with a requirement to borrow over $250k won’t be able to access funding under this scheme and will need to seek other finance options. So far, we have seen the banks pulling back and pulling out of deals they had previously agreed to fund. Leaving private lending as a viable option.
A short-term private loan is an affordable option to tide you over. These types of loans are perfect for a last-minute settlement, to take advantage of a one-off or special offer for the purchase of stock, or to use while you wait for business to pick back up. The terms are short, with the facility designed to meet a specific purpose.
Waiting for JobKeeper
Private funding can also support businesses while they await the JobKeeper Payment reimbursement to hit their bank account. Ideal for short-term cash requirements, private funding can assist businesses to keep the doors open (figuratively) and to continue paying staff while waiting for the government to reimburse the JobKeeper payment.
Keeping the property market moving forward.
Despite negativity in the media (wowsers, don’t they just looove a doom and gloom tangent!!) surrounding the property industry, construction in Australia perseveres. Each day we are seeing more and more stories of property sales, and property owners thinking outside the box, working together to create a commercial property opportunity for themselves.
Construction has been one of the few industries able to continue during isolation periods with operators finding a way to work within the requirements. As Australia works through the changes brought about by the ‘rona, property has reinforced its position as a critical part of the economy.
Private funding can assist with completion costs or hibernation costs depending on whether the property developer has chosen to persevere with their development, or park it to re-evaluate whether their project will meet the needs of a post-Corona Australia. Our Development Funding line can assist, check it out here then give us a tingle on 1300 668 551 to find out how we can help you and your project.
It will be ok.
Private lending has always had its place in the business world. Many business owners have never been in a position where they have had to call on it before, so please know we are here to help you so you can focus on what your business needs. This current level of disruption is not new to us, we successfully supported Australian small businesses and property developers through the GFC, and will still be around when the next crisis hits.
Please don’t feel like you have to go it alone, or that you have no options if you aren’t eligible for support from the banks or the Government stimulus. It costs you nothing but a few moments of time to send us an email and find out how we can help.