Dear Aunty B,
I have a small company that was started about three years ago. We are growing rapidly and cash flow has started to be an issue. I was wondering if anyone knew of options that are in between a credit card and venture capital. I do not want to give any portion of the company up and I already have two company credit cards.
A business loan would be ideal, however, they are difficult to get. Westpac has an unsecured line of credit for business purposes and I have applied for this however I was rejected. The primary assets of the company is stock. Are there any non-mainstream lenders that specialise in business loans that are not ridiculously expensive?
Fortunately for you I am sooo well connected. I hit the phones and called a good contact at the NAB and guess what? He likes the sound of you but it’s a bit like a blind date isn’t it? He needs to know you better before he makes a hand-on-heart call.
So get prepared. Here are some questions he will ask:
1) What is the turnover of the company?
2) What are the current credit limits on the cards and how much is owed?
3) Does the business owner have a property (ie, a home loan elsewhere)?
4) What are the additional funds required for there might be a better option?
But on the surface he says the potential options for finance would be:
a) A NAB ‘business access card’. This is essentially a line of credit facility (overdraft) and a credit card all in one; ie, when additional funds are required, the client can transfer the funds from their card into the business account. Once the client is able, they can then transfer funds back into the card facility to reduce interest paid. (This sounds good, Patrick!)
b) A NAB business mortgage overdraft. If the client has a property we can potentially secure a loan against their house (provided we have the first mortgage). The benefits to this are that the interest rate is kept to a minimum AND it is a lot easier to obtain a fully secured loan. (Hmmm, property. This one’s a bit predictable.)
c) An unsecured business instalment loan. Based on the financials of the business, we may be able to offer a three to five-year instalment loan facility (much like a personal loan but obviously for business). Hey … now we’re talking.
So Patrick, the person to ring is Matthew Van Der Riet on (03) 8634 4096.
Good luck and let us know how you go!
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