What is a Short Term Business Loan?
Short Term Business Loans are exactly that….. Short Term (of 1 to 6 months). As such, they are not charged on a per annum basis. Rather, they are simply charged on a per month basis at 4% per month. It’s simple, if you only need the funds for 1 month, you only pay one month’s interest. If you need the funds for 2 or more months we will just capitalise the interest for the term of the loan, meaning you don’t have to worry about physically paying the interest each month. To make it easier, it is all paid at the end when the loan is paid out. An Establishment and Legal fee will also apply and these are determined on the loan size and location. We can certainly advise this when you apply, or of course during an initial phone conversation discussing your scenario.
Quite simply these are the only costs and they’re clearly set out in the Conditional Letter of Offer that we issue within 2 hours of your Online Application being received. We really do aim to make this as simple as possible. There are no hidden costs, No tricky monthly costs, No hidden interest…. everything is fully disclosed. We know your time is valuable so we don’t want to waste it trying to make thinks complex.
You need money fast. We can get it to you fast. It’s that simple.
So… What Is The Procedure?
The procedure is very quick and simple. It has to be,
otherwise we can’t possibly settle in 24 hours.
- Complete the Online Application Form. (it takes just 2 minutes)
- Fax or email a Rates Notice & Mortgage Statement for the property being used a security, + 1 piece of Photo ID
- Within Two Working Hours, you will receive an answer on your application. If approved, you will receive a Conditional Letter Of Offer right away.
- Once the conditional offer is signed by you and faxed or emailed back to us, we start the due dilligence process. (this takes about 4 – 8 hours)
- Once the due dilligence is complete, we instruct our solicitors to issue loan contracts. These are emailed directly to your solicitor. You then need to attend your solicitors office to be given independent legal advice (for your own protection) and sign the documents. Your solicitor will witness your signature and certify 100 points of your ID.
- When this is complete, simply deliver the executed contracts back to our solicitors. They then lodge the caveat on the title, and we transfer the funds into your nominated bank account. We transfer the funds by TT (Telegraphic Transfer), which means you will have clear funds within 2 working hours.
How Do I Repay The Loan?
This is a quick and simple as it was obtaining the loan. Simply call our office (or your bank or conveyancer will if the Exit is a refinance or Sale), and book in a settlement time. We can usually be ready to settle within 24 hours of the call. (Monday to Friday) Once we receive a bank cheque or clear funds in our account, our caveat is removed from the title and that is THE END of the loan
Why would someone want a short term business loan?
CASH FLOW CRISIS. We had a plastering firm who had secured a big job, and to secure the big job the director gave 90 day terms to the project builder. The plasterer had 13 other plasterers on site working for him, and at around day 40 of 90, he ran out of money to pay wages. It was a union controlled site, so if no wages were paid, apart from having upset employees, they would be kicked off site. Payday was a Friday and he came to us on a Thursday. We loaned him $65000 for 2 months, and secured the debt against his house in Kew. In 2 months time, he paid us back when he got paid for the job. OUTCOME: We saved his bacon. MAXIMISE PROFITS. We have recently funded a doctor who needed access to $450,000 to buy medical equipment. The money he would have otherwise had to pay for this new consignment was not yet due and payable from the companies who he had sold his last consignment to. This new consignment would see him make 300% mark-up inside 2 months, so to pay between 4% month to get immediate access to the funds for 2 months was a small price to pay in order to make a large profit. We will get paid back from the realized income from the sale of either consignment one or two, or from a refinance of his property portfolio… whichever occurs first. OPPORTUNITY TOO GOOD TO MISS. We have had a variety of importers and retailers who have got onto a shipment of goods that they can buy off price if they pay cash in the next few days. These goods are not stolen. It is a straight forward commercial transaction where a manufacturer wants to clear old stock at a dramatically reduced price. When a retailer or importer can make 200% mark up or more as a result of getting their hands on this stock, paying 4% a month for 2 months in order to get the money in 24 hours makes good business sense…. Rather than miss out on the deal, and the profits. CONSOLIDATION. We have many commercial property investors who for one reason or another have fallen behind in their repayments. In order to refinance at a competitive rate, they need to bring their mortgage/s up to date. This is where we come in. As long as there is enough equity in the security properties, we will not be concerned about the fact that their first mortgage is in arrears…..However we will pay the funds directly to the first mortgagee to bring the loan up to date. (in these cases we do not advance the funds to the borrower) Often the client may have left things until the last minute, and situation is that critical that the first mortgagee is ready to send the sheriff around to evict. This is where the need for fast service is paramount. Naturally we need to see an exit strategy from the client (ie: refinance, sale of the property or another asset), and the loan must not be for personal use (or consumer purposes), or fall under the new NCCP.
THERE ARE MANY OTHER REASONS why people take out short term caveat loans. They could need access to funds in 24 hours to…
- Pay off an overlooked or overdue creditor or tax debt
- Fund a short fall on a business purchase or commercial property settlement
- Provide business cash flow due to an unexpected downturn
- An urgent advance on a pending refinance or property sale
We will lend for any worthwhile business or commercial investment purpose, as long as there is enough equity in the property (our max LVR is 75%), and as long as there is an Exit Strategy. (i.e.: sale of the property, refinance, or payment from a trade debtor, etc)
WHY DON’T THE BANKS OR FINANCE COMPANIES FUND CAVEAT LOANS?
Basically it comes down to speed, and in many cases, lack of financial records. If the borrower can wait 2 months, the bank maybe able to refinance them. If the borrower can wait 2 weeks, AND THEY HAVE FINANCIALS SHOWING GOOD CASHFLOW AND PROFIT RESULTS, they may qualify for an overdraft or business loan.
However if you need cash TOMORROW, they come to us.
Still not convinced??? Then ask yourself…. if I needed access to a large sum of money by tomorrow (leaving out rich uncles, etc), how would you get it?
WHAT SETS INSTANT BUSINESS FINANCE APART FROM OUR COMPETITORS?
- SPEED. We are virtually the only short term caveat lender who CAN physically settle within 24 hours. Many say they can, but their businesspractices and lack of resources makes it impossible.
- SERVICE. We issue letters of offer on approved loans within 2 working hours, and if approved, legal contracts are prepared within 5 working hours once the offer has been accepted by the borrower. We don’t require valuations, A&L statements, financial records, etc. Our staff keep the clients and brokers in the loop at every stage of the 24 hour process.
- INNOVATIVE PRACTICES. We email our loan contracts, rather than the 20th Century way of posting them, which could take 2 – 3 days to arrive. In addition, we settle by Telegraphic Transfer… not by cheque or internet transfer. This means the money hits the borrowers account as cleared funds within 2 working hours.
- WE ARE THE LENDER. As we hold the funds that we lend out, we don’t have to go off and broker the deals to investors or other lenders.