I/We (on my own behalf or, if acting as an agent for the borrower(s) or guarantor(s), on behalf of the borrower(s) and guarantor(s)) understand and agree to the following in connection with this loan application to funding.com.au:
- Funding.com.au will communicate, send information and disclosure and agree to things by SMS or email or via its website funding.com.au or any related websites.
- Funding.com.au may make information like statements, documents, disclosures and notices available electronically by SMS or email or via its website funding.com.au or any related wesbites.
- I/We will need to regularly check for electronic communications from funding.com.au.
- If information is provided electronically, I/we may not get a paper copy.
- I/We can cancel this agreement to get information electronically at any time. However, because funding.com.au is an online service, it may not be able to continue to provide its services to me/us.
- I/We can change my/our email address or contact phone number at any time by notifying funding.com.au via the contact email displayed on its website.
- I/We consent to funding.com.au interacting with us in such a manner.
- My/Our consent will apply to this mortgage loan application and any other mortgage loan applications hereafter.
- If I/we do not consent, funding.com.au will not be able to continue with the online application process, however it may still assist me/us in person or over the telephone.
- To receive disclosures electronically, I/we need access to an Internet browser, such as Internet Explorer, Mozilla Firefox or Google Chrome, and a PDF reader such as Adobe Acrobat or CutePDF, since disclosures may be in PDF format. I/we will also need access to a printer or the ability to download information in order to keep copies for my/our records.
- I/We are entitled to receive a copy of any notice or other document under the National Credit Code however, by confirming and consenting to this nomination, all I/we agree I/we are giving up the right to be provided with information direct from funding.com.au (ie. It will be provided to the primary contact who will provide it to you).
- I/We may advise funding.com.au in writing at any time, that I/we wish to cancel my/our nomination.
- I/We nominate or have nominated the primary contact to receive notices and other documentation in connection with my/our loan under the National Credit Code on my/our behalf.
- I/We consent or have consented to the primary contact recieiving notices, at the primary contact’s address or email, and other documentation in connection with my/our loan under the National Credit Code on behalf on me/us.
- I/We the primary contract agree to provide any items to the other borrowers or gaurantors.
In the event I/we were not present or did not complete the loan application and approval process online, the following is understood and agreed upon:
- The primary contact has been nominated and/or appointed as agent and/or has been appointed under a power of attorney on my/our behalf to complete and submit the loan application and conclude the loan application process.
- The primary contact has been nominated and/or appointed as agent and/or has been appointed under a power of attorney on my/our behalf to accept any indicative terms in the conditional approval.
- The primary contact acts, submits and agrees to these terms, conditions and policies in their own right and if applicable in their capacity as agent or attorney on my/our behalf.
- The primary contact warrants the truth of the above terms and indemnifies the lender against any loss due to fraud or misrepresentation.
- If such agency or nomination or attorney is revoked at anytime the primary contact will alert funding.com.au immediately.
By checking the box and/or clicking on the "agree" button I/we are taken to have accepted the the above terms. Checking the “agree” button of this electronically signed document is the same as providing a written signature under the terms of the Electronic Transactions Act 1999 (Cth).
Funding.com.au and any reference to funding.com.au includes funding.com.au Pty Ltd, funding Pty Ltd, it and any other parent companies, subsidiaries, affiliates, successors, assignors, brokers, insurers, lenders, investors and agents and this agreement extends to them.
I/We (on my own behalf or, if acting as an agent for the borrower(s) or guarantor(s), on behalf of the borrower(s) and guarantor(s)) understand and agree to the following in connection with this loan application to funding.com.au:
- The conditional approval is an indciative loan offer or approval presented and signed electronically by funding.com.au.
- The information provided in the loan application is true, complete and correct, in all material respects.
- I/We understand that any misrepresentation or omission (whether intentional or negligent) of information contained in this application may result in civil liability, including monetary damages, to any person who may suffer any loss due to reliance upon any misrepresentation or omission that I/we have made in this application.
- Funding.com.au may continuously rely on the information contained in the loan application, and I/we are obligated to amend and/or supplement the information provided in this application if any of the material facts that I/we have represented herein should change prior to closing of the loan for which I/we are applying for.
- Funding.com.au may retain the original and/or an electronic record of this application, whether or not my/our loan application is approved.
- I/We are willing and able to provide applicable documents in the document list.
- If the loan is a second mortgage, the first mortgage priority amount is to be confirmed directly with the first mortgagee and verified. An authority will be sent to and required by the mortgagor and any other account holder on the first mortgage.
- If a company is a party to the loan the electronic acceptance has been executed and signed electronically in accordance with s127 of the Corporations Act 2001.
- If a company is a party to the loan and all directors are not included as parties on the loan, it is be a requirement that such missing directors become guarantors to the loan unless otherwise waived by funding.com.au.
- A security Interest registered on the PPSR charge will be required over any business or company in the application.
- The applicable interest rate shown is the “discount rate” for when not in default under the loan terms. If a default occurs, the “normal rate” will be due and payable which is 6% higher than the discount rate (for example if the discount rate is 10% the normal rate will be 16%).
- Interest payments: If my/our loan is a consumer loan, payments will be in arrears. If my/our loan is a business loan, payments will likely be in advance unless otherwise agreed.
- Funding.com.au reserves the right to review how the interest is paid on the loan and is not bound by the conditional approval (ie. If the conditional approval states interest is to be paid monthly, it is subject to serviceability assessments and the lenders consideration).
- If the loan falls under the National Credit Code, this is to be construed as my/our Credit Quote and Credit Proposal.
- These terms are only indicative and may be subject to change on completion of the lender’s due diligence process. I/we therefore must not rely on being granted unconditional finance approval until a formal letter of offer or loan agreement has been issued and it has been accepted by me/us and the loan has been formally approved.
- On signing I/we hereby authorise and appoint funding.com.au to source funds on my/our behalf.
- If I/we have been referred to funding.com.au by an unlicensed third party, it has been done on the basis the third party merely referred/passed on my/our the debtors contact details or the details of funding.com.au to us. If the unlicensed third party provided a credit service or credit assistance (ie. suggested or assisted me/us to apply for a particular credit contract with a particular credit provider) I/we must immediately notify funding.com.au so they are able to assess the matter prior to proceeding. Any fee paid to the unlicensed third party is purely for marketing/leads/referrals and is not paid to the third party for credit activity or assistance provided to me/us by the unlicensed third party.
- In consideration of this agreement and in the event the loan does not proceed due to my/our own default, I/we hereby charge all my/our assets including but not limited to any real estate, including the security named herein, with the repayment of any money owing under this agreement (including all legal costs and outlays, brokerage fees and establishment fees). If the loan does not proceed for any reason other than my/our default this clause shall be unenforceable. I/we consent to the lodging of a Caveat over such property to better secure the repayment the legal costs incurred.
- Settlement of the loan must occur within 10 days from the date of acceptance of the conditional approval/application unless funding.com.au agrees to a longer time frame If settlement does not occur within 10 days, at the fault of me/us, interest will accrue daily thereafter until settlement.
- I agree to appoint funding.com.au or its directors as power of attorney to sign any paper copy of the loan application or conditional approval on my/our behalf if a paper copy is required for any reason what so ever.
- By signing the below acceptance I/we agree to receive this and any credit guide/proposal electronically.
- I/We confirm there are no foreseeable significant changes to my/our circumstances that will lead to changes in my/our ability to make contracted repayments.
- This loan application and conditional approval is subject to any other documents the lender’s lawyer requires.
- All dollar amounts are expressed in AUD.
- All entities on the loan require independent legal advice when signing the formal loan documents.
- If a formal valuation is required a formal quote will be obtained and the application fee will be contributed towards this cost. Any further amount required for a formal valuation will be required to be paid by the borrowers/guarantors prior to proceeding further.
By checking the box and/or clicking on the "agree" button I/we are taken to have accepted the the above terms. Checking the “agree” button of this electronically signed document is the same as providing a written signature under the terms of the Electronic Transactions Act 1999 (Cth).
Funding.com.au and any reference to funding.com.au includes funding.com.au Pty Ltd, funding Pty Ltd, it and any other parent companies, subsidiaries, affiliates, successors, assignors, brokers, insurers, lenders, investors and agents and this agreement extends to them.
I/We (on my own behalf or, if acting as an agent for the borrower(s) or guarantor(s), on behalf of the borrower(s) and guarantor(s)) understand and agree to the following in connection with this loan application to funding.com.au:
1. By agreeing to these terms I/we consent to funding.com.au and it’s related or other entities collecting, using, holding and disclosing personal and credit information about me/us. Funding.com.au will deal with my/our privacy in accordance with the policy above. If I/we do not provide funding.com.au with this consent or provide funding.com.au with my/our personal information funding.com.au may not be able to arrange finance for me/us or provide other services.
2. Funding.com.au may collect, use, hold and disclose personal and credit information about me/us for the purposes of arranging or providing credit to me/us, managing that credit, direct marketing of products and services by funding.com.au and managing its relationship with me/us.
3. Credit information includes the type and amount of credit provided to me/us, repayment history information, default information (including overdue payments) and court information. Personal information includes any information from which my/our identity is apparent.
Consumer and commercial credit information
5. Funding.com.au may exchange my/our commercial and consumer credit information with other entities to assess an application for consumer or commercial credit and manage that credit. In particular, funding.com.au can obtain credit information about me/us from a CRB.
Exchange information with credit providers
6. Funding.com.au may exchange my/our personal and credit information with other credit providers or credit assistance providers for the purposes of assessing my/our creditworthiness, loan application, credit standing and credit history or credit capacity.
Exchange information with guarantors
7. Funding.com.au, third parties, lenders or lender’s mortgage insurers may exchange my/our personal and credit information with any person who proposes to guarantee or has guaranteed repayment of any credit provided to me/us.
a. Finance brokers, mortgage managers, and persons who assist funding.com.au to provide products to me/us.
b. Any lender or investor.
c. Financial consultants, accountants, lawyers and advisers.
d. Any industry body, tribunal, court or otherwise in connection with any complaint regarding the approval or management of my/our loan – for example if a complaint is lodged about funding.com.au or the lender.
e. Businesses assisting funding.com.au with funding for loans.
f. Trade insurers.
g. Any person where funding.com.au is required by law to do so.
h. Any of funding.com.au’s associates, related entities or contractors.
i. My/our referees, such as my/our employer, to verify information I/we have provided.
j. Any person considering acquiring an interest in funding.com.au’s business or assets.
k. Any organisation providing online verification of my/our identity.
9. Funding.com.au may disclose personal information about me/us to an organisation providing verification of my/our identity, including on-line verification of m/your identity.
10. Funding.com.au may verify my/our identity using information held by a CRB. To do this funding.com.au may disclose personal information such as my/our name, date of birth, and address to the CRB to obtain an assessment of whether that personal information matches information held by the CRB. The CRB may give funding.com.au a report on that assessment and to do so may use personal information about I/we and other individuals in their files. Alternative means of verifying my/our identity may be available on request. If funding.com.au is unable to verify my/our identity using information held by a CRB funding.com.au will provide my/us with a notice to this effect and give me/us the opportunity to contact the CRB to update my/our information held by them.
11. By agreeing online and ticking yes, or by making any loan application with funding.com.au or by applying for credit I/we agree and declare:
12. I/We and any guarantors are all aged over 18 years. The information set out in the application or otherwise provided about me/us and any guarantor is true and correct and will be relied on.
13. I/We consent to the disclosure of this application and any loan information (including statements of account, requests for payment, etc) before during or after the loan to any guarantor.
14. I/We acknowledge that commissions may be payable by lenders to funding.com.au for the loan, insurance and other services provided in connection with the loan.
15. I/We authorize funding.com.au to provide to any investor, to whom funding.com.au may look to sell or re-sell, my/our mortgage for which I/we have applied and any information provided in connection with my/our loan application and any information or data related to my/our loan. Such information includes, but is not limited to, employment history and income; bank, money market, and similar account balances; credit score and credit history; and copies of income tax returns.
16. The above is a continuing consent and I/we further authorize funding.com,au to obtain consumer reports each time I/we apply for a loan or at various times during the term of my/our loan in connection with the servicing, monitoring, collection or enforcement of the loan or the resale or potential resale of my/our loan.
17. I/We authorise funding.com.au to disclose certain information from my/our application and/or any consumer report to users of the funding.com.au website who are registered as Registered Investors to use such information in making decisions regarding whether to commit funds to my/our mortgage; provided, however, that in no instance will funding.com.au disclose or display to Registered Investors any of my/our personally identifying information.
By checking the box and/or clicking on the "agree" button I/we are taken to have accepted the the above terms. Checking the “agree” button of this electronically signed document is the same as providing a written signature under the terms of the Electronic Transactions Act 1999 (Cth).
Funding.com.au and any reference to funding.com.au includes funding.com.au Pty Ltd, funding Pty Ltd, it and any other parent companies, subsidiaries, affiliates, successors, assignors, brokers, insurers, lenders, investors and agents and this agreement extends to them.
- Personal information about visitors to funding.com.au’s web site is collected only when knowingly submitted. For example, funding.com.au may need to collect such information to provide me/us with further services or to answer or forward any requests or enquiries. It is funding.com.au’s intention that this policy will protect my/our personal information from being dealt with in any way that is inconsistent with applicable privacy laws in Australia.
- Apart from where I/we have consented or disclosure is necessary to achieve the purpose for which it was submitted, personal information may be disclosed in special situations where funding.com.au has reason to believe that doing so is necessary to identify, contact or bring legal action against anyone damaging, injuring, or interfering (intentionally or unintentionally) with its rights or property, us, or anyone else who could be harmed by such activities. Funding.com.au may also disclose personal information when it believes in good faith that the law requires disclosure.
- Funding.com.au may engage third parties to provide me/us with goods or services on its behalf. In that circumstance, funding.com.au may disclose my/our personal information to those third parties in order to meet my/our request for goods or services.
- Funding.com.au strives to ensure the security, integrity and privacy of personal information submitted to its site, and it reviews and updates its security measures in light of current technologies. I/We understand that no data transmission over the Internet can be guaranteed to be totally secure however, funding.com.au will endeavour to take all reasonable steps to protect the personal information that I/we transmit to it or via its online products and services. Once funding.com.au receives my/our transmission, it will make its best efforts to ensure its security on its systems.
- In addition, funding.com.au employees and the contractors who provide services related to its information systems are obliged to respect the confidentiality of any personal information held by funding.com.au. However, funding.com.au will not be held responsible for events arising from unauthorised access to my/our personal information.
- Funding.com.au will endeavour to take all reasonable steps to keep secure any information which it holds about me/us, and to keep this information accurate and up to date. If, at any time, I/we discover that information held about funding.com.au is incorrect, I/we may contact funding.com.au to have the information corrected.
- In addition, funding.com.au employees and the contractors who provide services related to its information systems are obliged to respect the confidentiality of any personal information held by funding.com.au.
Links to other sites
- Funding.com.au provides links to web sites outside of its web sites, as well as to third party web sites. These linked sites are not under funding.com.au’s control, and funding.com.au does not/cannot accept responsibility for the conduct of companies/businesses/organisations linked to its website. Before disclosing my/our personal information on any other website, funding.com.au advises the terms and conditions of using that web site and its privacy statement be examined and understood.
Further privacy information.
- For more information about privacy issues in Australia and protecting my/our privacy, I/we can visit the Australian Federal Privacy Commissioner’s web site. http://www.privacy.gov.au/
- To see how Google uses data when funding.com.au uses its partners’ sites or apps – I/we can visit – http://www.google.com/policies/privacy/partners/
Alternatively you can write to "Privacy Complaints Manager, funding.com.au Pty Ltd, Level 3, 33 Elkhorn Avenue Surfers Paradise QLD 4217. If you are not satisfied with the manner in which We deal with your complaint you may refer it to the office of the Australian Information Commissioner ("OAIC"). You can contact OAIC by:-
forwarding an email to email@example.com
telephoning 1300 363 992; or
writing to OAIC at GPO Box 5218, Sydney NSW 2001
If we have not already verified the investor previously, we will be using an electronic identity verification service in order to verify your identity. This is done by checking your information with the relevant official record holder or DVS. Please confirm that you consent to us verifying your identity with an electronic identity verification service. https://www.funding.com.au/cms_page/privacy-policy.
funding Pty Ltd A.C.N. 607 035 861, Australian Credit Licence (#483665)
and/or its credit representative funding.com.au Pty Ltd or its nominee
Note the credit provider may also act as credit assistance provider, so where applicable the correct term is to be used interchangeably herein.
This guide provides consumers who are potential customers with details of funding.com.au’s credit assistance or credit providing services. Funding.com.au advises I/we read this document carefully and ensure I/we understand it.
Note. This is not for any business related loans or finance. The credit guide only relates to any credit contracts under the National Consumer Credit Protection Act (“the Act”).
Where funding.com.au merely provides the lender’s information, it is not providing credit assistance and therefore this guide is likely to not apply.
The terms “funding.com.au”, “funding Pty Ltd”, “it”, “its” refers to the credit provider.
Funding.com.au provides consumer and non-consumer lending products such as:-
Funding.com.au’s obligations (under the National Consumer Credit Protection Act 2009 (s120 & 123 & generally)
To not provide credit to consumers that is unsuitable.
funding.com.au will assess whether its credit contract is suitable or not based on the information I/we provide and information it verifies.
The credit contract will be unsuitable if it is likely I/we will be unable to comply with my/our financial obligations under the contract, or could only comply with substantial hardship; or the contract does not meet my/our requirements or objectives.
This is a legal obligation funding.com.au has.
Obtaining a copy of suitability assessment
I/We can request a copy of the credit assessment within 7 years of obtaining credit from funding.com.au or prior to obtaining credit. If my/our request is within 2 years of obtaining credit funding.com.au must provide the assessment within 7 working days. If my/our request is outside 2 years of obtaining credit I/we must provide the assessment within 21 working days.
Internal Dispute resolution
If I/we have a dispute, funding.com.au recommends I/we contact it first.
funding.com.au will endeavor to resolve the dispute within 7 days.
Should funding.com.au not be able to resolve the dispute within 28 days it will notify me/us in writing.
External Dispute Resolution
If I/we are still unhappy with funding.com.au’s decision or have an unresolved dispute, I/we can contact the Credit and Investments Ombudsmen (CIO).
Between 9am to 5pm, Monday to Friday
1800 138 422
Funding.com.au’s fees and charges
The credit providers’ fees are outlined in the quote or formal loan offer. The credit assistance providers are paid brokerage fees or commissions on the loans introduced. Depending on the loan, product or lender this will either be paid by the lender or be payable by me/us the consumer. I/We will be notified of any fees payable by me/us in the credit quote. These fees or commissions are typically between 1% and 3% of the loan amount.
I/We may obtain information from funding.com.au regarding how fees and charges are payable and are worked out, a reasonable estimate of commissions likely to be received and how they are worked out on request.
Funding.com.au may pay fees to call centre companies, real estate agents, accountants, or lawyers and others for referring me/us to it. These referral fees are generally small amounts in accordance with usual business practice. These are not fees payable by me/us. On request I/we can obtain a reasonable estimate of the amount of the fee and how it is worked out.
From time to time, Funding.com.au may also be paid referral fees, brokerage fees or commissions on the loans it introduces to other lenders. Depending on the loan, product or lender this will either be paid at a fixed fee for a lead or fixed percentage (ie. 1% of the credit amount) and paid to Funding.com.au in most cases by the lender. If any fees are payable by me/us, I/we will be notified of such fees payable in the credit quote.
Funding.com.au’s credit providers
Funding.com.au specialises in providing credit assistance from credit provided from non-bank lenders or it provides credit as credit provider (ie the actual lender). Most of Funding.com.au’s business is conducted with funding Pty Ltd or its credit representatives or associated groups.
Fees payable to third parties.
Funding.com.au may pay fees to call centre companies, real estate agents, accountants, or lawyers and others for referring me/us to it. These referral fees are generally small amounts in accordance with usual business practice. These are not fees payable by me/us. On request I/we can obtain a reasonable estimate of the amount of the fee and how it is worked out. From time to time, Funding.com.au may also remunerate other parties through payments, rewards or benefits.
Funding.com.au do not currently have any volume bonus arrangements.
Funding Pty Ltd
C/- Level 3, 33 Elkhorn Avenue
SURFERS PARADISE QLD 4217
I/We will provide when requested by the lender any item applicable to my/our loan in the below document list.
To make the application process as smooth as possible I/we will need to provide a number of original or certified copies of documents to support my/our application. The following is a guide to what documents may be required to support my/our loan application:
I/We understand the documents will be required in the next step of m/your loan approval prior to settlement.
Only the applicable items to my/our situation apply.
This list may differ in particular circumstances.
- Sufficient identification documents (for all individuals)
- Solicitor’s details (Firm name, Lawyer name, Phone, Email)
- A/c details for surplus loan funds
- Asset and liabilities statement – borrower (one for each borrower and guarantor)
- Copy of most recent Council rates & water Notices on all properties
- Copy of most recent Body Corporate Notices (if applicable) on all properties
- Last mortgage statements of all other debts being refinanced
- Renovations (if applicable) - List of improvements to be made to the property and estimates
- If Leased: Rental - Copy of Lease/s and/or Managing Agent’s Statement and 3 bank statements showing rental
- Copy of property contract
- Evidence of deposit being paid (ie trust account receipt or email from holder of deposit)
- Proof of funds to complete (bank account balance or statement)
- Property sale contract
- Agent listing agreement and/or marketing appraisal and marketing program;
- Refinance pre-approval of letter of offer
- Email from mortgage broker with proposed lender’s details, product and showing approval potential/confidence
- Credit file (if held)
- Explanation on arrears or bad credit or debt
- Other supporting evidence
- Monthly budget (combined or one for each party to the loan)
- Last 6 months mortgage statements on Owner Occupied Debt (if applicable)
Bad Credit borrowers
- Explanation for below average credit, arrears / defaults
- 2 current payslips or letter of employment from employer confirming weekly pay
- Bank Statements to confirm last 3 months salary credits
(Self-employed applicants or business income (a combination of the following can be utilized))
- Declaration of Financial Position
- 6 months Business Bank Statements
- Last 2 BAS Statements
- Accountant’s Letter
- Last Financial Statements
- Last Certified Tax Returns + Tax Assessment Notice
(Other (if applicable))
- Rental - Copy of Lease/s and/or Managing Agent’s Statement and 3 bank statements showing rental
- Evidence of child support
- Centrelink statement
Building / construction
- Building permit
- Planning permit / development approval
- Building contract;
- Building Insurance.
- Building Permit
- Costs to complete
- Building insurance
- As consideration for allowing me/us the user (User / me / us / I / we) to view, visit and/or use funding.com.au’s website, located at the url, www.funding.com.au (Site), or any other website owned by funding.com.au, I/we agree to the following terms and conditions of use (Terms and Conditions).
- Content means text, data, speech, music or other sounds, visual images (animated or otherwise) in any form, or in any combination of forms.
- Facilities means any feature that appears on the Site for Users to use.
- Member Account means an account created by a User for the purposes of accessing the Sites enhanced Content and Facilities.
- By viewing the Content, using the Facilities on the Site or creating a User Account, I/we acknowledge and agree that I/we have had sufficient opportunity to read and understand these Terms and Conditions, and that I/we are legally able to agree to be bound by them.
- If I/we do not agree to these Terms and Conditions, I/we should leave this Site immediately.
- These Terms and Conditions constitute a binding agreement between me/us and funding.com.au, its agents, subsidiaries, affiliates, successor entities and / or assigned entities.
- Funding.com.au reserves all copyright in the Content and design of the Site. Funding.com.au owns all such copyright and/or provides it to Users under the terms of a limited licence embodied in these Terms and Conditions each time Users visit the Site.
- Users may download, print or copy Content provided on the Site for Users own use. Unless provided with a mechanism to do so, Users must not sell, lease, furnish or otherwise permit or cause others to provide access to the Site.
- Users must not use, reproduce, communicate, publish, or distribute any of the Content on funding.com.au’s Site, unless this constitutes a fair dealing for the purposes of the Copyright Act 1968 (Cth) (Act).
- Other than for the purposes of and subject to the conditions prescribed under the Act as otherwise provided for in these Terms and Conditions, no part of the Content may in any
- microcopying, photocopying or recording be reproduced, adapted, stored in a retrieval system or transmitted without prior written permission.
Use of Member Account
- By completing the loan application or some other form on funding.com.au Users have requested that funding.com.au open an account login or member account in my/our name.
- Users agree to keep any passwords provided by the Site confidential. Users are expressly prohibited from sharing their account details with third parties.
- Users must provide true, current, accurate and complete information about themselves when creating an account.
- By registering with funding.com.au, Users represent that Users are of legal age to form a binding contract and are not a person barred by any laws from using this Site.
- Funding.com.au reserves the right to limit, cancel, suspend or terminate a Member Account without notice to the User and without providing a reason if funding.com.au believes the User is breaching any of these Terms and Conditions or relevant laws, or are of the opinion that the User’s use of the Member Account may be a breach of a third party’s intellectual property rights.
- Users Agree not to hold funding.com.au liable for claims, demands or damages (including actual and consequential) of any kind for the closing of a Member Account.
Prohibitions on Use of Site
- This Site and the information and facilities contained herein must not be used in any manner that infringes funding.com.au rights. Users must not:
- data mine or conduct automated searches on the Site or the Content on the Site, whether through the use of additional software or otherwise;
- frame or mirror the Site;
- tamper with, hinder the operation of, or make unauthorised modifications to the Site or any of its Content;
- transmit any virus, worm or other disabling feature to or via the Site;
- access, monitor or copy any Content of the Site using any robot, spider, scraper or other automated means or any manual process for any purpose;
- abuse, defame, harass, stalk, threaten or otherwise violate funding.com.au’s rights or another User’s legal rights;
- advertise or offer to conduct or forward surveys, contests, or chain letters from the Site or the domain;
- delete any author attributions, legal notices or proprietary designations or labels in any file that is uploaded by a User;
- use the Site to send commercial, unsolicited or bulk electronic messages to anyone or in any other way which would constitute an infringement of the Spam Act 2003 (Cth);
Take down procedure
- Funding.com.au takes all reasonable steps to be aware of Content published by Users on the Site. Funding.com.au commits to remove all material as soon as practical after it is notified that Content may be a breach of copyright or other intellectual property rights, is defamatory or otherwise claimed to be illegal.
- To notify funding.com.au of a claimed infringement of Copyright, a notification can be sent to funding.com.au that includes the following information:
- the alleged material in which copyright is claimed and its location on the Site;
- information about the complaining party (Complainant) including for example:
- telephone number (land line and mobile);
- email address;
- an electronic or physical signature of the copyright owner or authorised agent of the owner of the allegedly infringing material;
- identification of the material that is claimed to be infringing or to be subject to infringing activity and that is to be removed and information reasonably sufficient to permit funding.com.au to locate the materials;
- a statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, agent, or the law; and
- a statement that the information in the notification is accurate and, under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringing.
- Users acknowledge and agree that if funding.com.au receives a notice of a claim of copyright infringement, it may immediately remove the material from the Site without further notice.
- To notify funding.com.au of material that is believed should be removed from the Site, other than because of alleged Copyright, an email can be sent to the address displayed on funding.com.au’s contact page.
Provision of Service
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Property loans and investment.
Brokers and introducers
We lend to individuals and companies looking for short to medium term loans for any purpose. We take a common sense approach to lending and can often assist when the banks cannot.
What type of borrowers can apply?
Borrowers can be individuals, companies or trusts borrowing for any purpose including personal or business. Borrowers must have sound real estate security, the ability to meet their repayments and a strong repayment strategy to exit the loan at the end of the term.
What terms do you offer?
Loan terms are typically between 1 and 36 months.
How are brokerage fees/commissions paid?
On settlement. Ask us about the current fee structure.
What is the interest rate and fees?
The borrower will receive a customized quote tailored to their specific loan needs.
What is the LVR on loans?
The loan to value or LVR is the maximum lend secured over the property. Our typical LVR is 65% or lower of the property value. On some occasions, 70% may be considered depending on the location and type of security property.
What properties do you accept as security?
Residential, commercial and vacant land. In all metropolitan areas in all states.
What is a mortgage fund?
A mortgage fund is a type of investment product. In Australia it is commonly in the form of a managed investment scheme (MIS) also known as a mortgage scheme or a mortgage trust, however can take other forms.
It has and continues to be quite a popular investment choice for all types of investors including retail "Mum and dad" investors, sophisticated investors, wholesale investors and more recently Self Managed Super Funds (SMSF) Investors.
Benefits of a mortgage fund include:
- Fixed regular income.
- Attractive rates of return.
- Fixed term investments (typically short to medium term).
- Underlying real estate security.
Borrowers also benefit as they find it as a useful, convenient source of funding with less hassles than applying to the major banks.
How does a mortgage fund work?
A mortgage fund is a finance company or institution. There are two sides to every Mortgage fund, the investors and the borrowers. Investors invest their money on agreed terms with the mortgage fund and those funds are then utilised to fund loans to the borrowers.
Mortgage funds approve borrowers based on their lending policy and criteria. Borrowers provide real estate security for the loan in the form of a mortgage over their property.
What is a mortgage?
A mortgage is a lien or encumbrance over real estate property. It secures the loan to the borrower and if the borrower defaults, the property can be sold to recoup the loan. It's exactly like getting a home loan from the major banks.
How long have mortgage funds been around?
The current form of the Managed Investment Schemes was introduced under the legislation Managed Investments (Act) (Cth) in 1998.
Prior to this there were different types of mortgage schemes and investment vehicles. A popular setup was what's termed "solicitor loans" or "solicitor funds". This form was was often operated by lawyers and solicitors (hence the name). Borrowers would approach their lawyer for a mortgage loan and the lawyer would approach another client of theirs they knew who invests in mortgages. This practice was phased out due to the potential conflict situations solicitors could end up in acting for both the borrower and the lender/investor. The Managed Investments Act was introduced to assist in regulating the industry and Lawyers engaged in this mortgage practice were forced to either become licensed under the new regime or operate differently or wind down their mortgage lending businesses.
What is the structure of the investment?
As mentioned above, there are a few different forms of mortgage funds, each with their own pros and cons. The 3 main structures include a pooled fund, a contributory fund and a debenture fund.
A pooled mortgage fund, as the name suggests, pools investors money and then lends it out across multiple mortgages. The investor receives a set fixed return for a fixed period or term and makes no decisions as to which mortgages the funds are invested in. The rate or returns on this form are typically lower and suits a more passive investor. The investors usually all share in the lending risk across the entire portfolio of mortgages.
For example pooled options would look something like this:
6 months, 5%
12 months, 5.25%
24 months, 5.5%
36 months, 6%
Whilst it depends on the fund investors often enjoy:
- Passive income
- Set and forget
- Interest from day one
- Diversification across a pool of mortgages
- Slightly Lower returns (the fund has to pay interest to investors even when the funds have not yet been on lent resulting in lower returns).
- No direct control of where funds are invested.
As an investor, is important to read the PDS to in sure you understand the exposure to assets and the security properties of the fund (i.e. you may not rural properties or development funding etc
Contributory or select fund
A contributory mortgage fund or what's often called a select mortgage fund or a direct mortgage fund, allows the investor to select the mortgages they will be contributing to. They normally can select mortgages taking into consideration things like loan purpose, location, term and interest rate. The investors exposure is usually limited to the particular mortgages they choose.
For example a contributory mortgage would look something like this:
Rate of return 7.5%
Purpose: bridging finance
Total loan amount$350,000
Security property value: $650,000
Rate of return 7.95%
Purpose: business finance
Total loan amount $250,000
Investors contribution: $500,000
Investors can choose multiple mortgages they feel comfortable with and spread their funds across multiple loans.
- Direct control over where your funds are invested
- Slightly higher returns
- Choice in property class exposure
- Interest from start of investment.
- Wait times for investments to become available.
With online features including dashboard accounts where you can select mortgages or set parameters for automatic investments this is increasingly popular.
As you can see select investments are stand alone investments which means there is no exposure to a pool of mortgages. If another loan to the mortgage fund defaults it won’t affect your loan.
Whether contributed or pooled, the scheme is structured as a managed investment scheme. This is a trust where the investor gets units in the trust which correlate to their rights whether pooled or to a specific mortgage.
The other form of of a mortgage fund is a debenture mortgage fund. This is where the investor provides a loan (rather than receiving units) to the finance company (the mortgage fund) which then pools the money and uses the cash in its day to day lending operations by on lending the funds. It's similar to the pooled scheme mentioned above however the investor normally gets debentures (small loan obligations) instead of units in a trust. This debenture fund style has lost in popularity with notable collapsed funds that have closed down. This structure doesn't fall under the MIS regulation and more information on debentures can be found here on ASIC’s money smart website (https://www.moneysmart.gov.au/investing/investments-paying-interest/unlisted-debentures-and-unsecured-notes)
Direct mortgage investments
Another type of mortgage investment is a direct mortgage. Direct mortgage investments are where the entire loan is funded by the investor and the investor’s entity holds the mortgage/loan. These are suited to larger investors.
How do I compare mortgage funds?
When comparing mortgage funds, an investor should look at a few key things:
- The form of investment (pooled, contributory, debenture).
- The type of security being lent on.
- The size of loans.
- The LVR on loans.
- The experience of the management team.
The loan to value (LVR) or loan to value (LTV) is the percentage of the loan value against the property value. Ie a loan of $250,000 on a property to the value of $500,000 is a 50% lVR.
To improve the disclosure information about mortgage funds in Australia, ASIC requires us to provide information about eight (8) benchmarks. From 30 November 2008, all PDSs for unlisted mortgage funds
are required to include the following statements in respect of each benchmark:
•• that the Fund meets the benchmark; or
•• that the Fund does not meet the benchmark, and an explanation of how and why the Fund deals
with the business factor or issue underlying the benchmark in another way.
“The eight benchmarks and disclosure principles focus on the following:
- Liquidity - What is the scheme's policy on managing liquidity and does the scheme has enough cash and liquid assets to make regular distributions and pay back its investors?
- Scheme borrowing - Does the scheme have any current borrowings, or intention to borrow? How will it repay any debts, in the short term and over the life of the scheme?
- Loan portfolio and diversification - What is the scheme's policy on diversification and has the mortgage scheme spread its risk between different borrowers and investments?
- Related party transactions - Do any of the mortgage scheme's transactions involve parties that have a close relationship with the responsible entity? What are the details and risks of these transactions and relationships?
- Valuation policy - How are the mortgage scheme's underlying assets valued and how often are the valuations carried out?
- Lending principles (loan-to-valuation ratios) - What is the size of the loans compared to the value of the assets used as security for the loans? The higher the ratio, the higher the risk of losing your money.
- Distribution practices - Are current distributions being paid with borrowings? How often are distributions being paid?
- Withdrawing arrangements - Whether you can withdraw from the mortgage scheme, what conditions must be met and how long it will take to get your money back.”
There are numerous layers of regulation and compliance with mortgage trusts including:
- The Corporations Act is the key governing legislation which include the managed investment scheme provisions.
- Australian Financial Services Licence (AFSL) requirement. The Responsible entity who acts as trustee of the fund typically holds an AFSL.
- An independent Custodian is used to hold the assets of the fund.
- An independent Auditor is used to conduct yearly audits of the fund.
- ASIC - The Australian Securities and Investment Commission is the regulatory body and watchdog of the investment industry.
Investors, wholesale and retail mortgage funds
There a typically two types of investors of which mortgage funds can offer their investment products to.
The first is wholesale and sophisticated investors. Simply put, this is an investor who has a net worth, income or investment amount higher than thresholds set by law. Offering products to these types of investors is less regulated.
The second type is a retail investor. This is anyone who is not a wholesale investor.
Some funds are available to all investors, others only wholesale.
What is a first mortgage fund?
A first mortgage is one that only invests in first mortgages. A first mortgage is the first ranking charge over the property. In contrast a second mortgage goes behind a first mortgage and comes with it certain risks. When a property is sold or realised the first mortgagee ranks in priority and is paid out first. Second mortgages usually offer higher returns however carry with it greater risk and therefore it is often suggested investors should only invest in second mortgages if they know what you are doing and are educated on this type of investment.
Fintech, peer to peer lending, marketplaces and mortgage funds
Financial technology or "fintech" is disrupting the finance industry and with that the mortgage fund industry is changing. You may or may not have heard new terms like fintech, peer-to-peer, P2P lending or marketplace lending. In a nutshell these are the terms for new online websites and software that is changing the process and experience for both investors and borrowers in a positive way. From an investors point of view, changes are positive with more efficient investment processes and more transparency relating to loans.
- Online portals to monitor your loan investments
- Pick and select loans online
- Auto-select features
The underlying structure of these new marketplace lending is a similar to the Contributory style of mortgage fund.
funding.com.au, is in the running to take out one of Australia’s top industry awards.
Funding.com.au has been shortlisted as a finalist to win two awards – Investment Innovator of the Year and Lending Innovator of the Year – at the 2018 Fintech Business Awards, hosted by Fintech Business, an Australian publication focused on the evolving Australian fintech community and its projection on the global stage.
Funding.com.au is a financial technology platform that provides real estate secured loans to borrowers, and attractive mortgage investments to investors. It is the first start-up of its kind in Australia to gain regulatory authorisation to allow both wholesale and retail investors access to residential and commercial mortgages. The company was founded in 2015 by mortgage lawyer, Jack O’Reilly.
Now in its second consecutive year, the Fintech Business Awards recognises the individual and company excellence of Australia’s top financial technology players as well as the industry’s most promising, up-and-coming talent.
Winners in the individual categories will automatically be shortlisted for the coveted Fintech Business Excellence Award, which recognises an individual’s outstanding contribution to the fintech industry.
“Following the success of the inaugural Fintech Business Awards in 2017, we are encouraged by the overwhelming number of submissions and the quality of finalists for the 2018 awards program,” said Fintech Business managing editor Aleks Vickovich.
“The high calibre of finalists to this awards program reflects the maturity and success rapidly emerging in the Australian fintech sector. We are proud to highlight the innovation and leadership in this important business community.”
Jack O’Reilly, Managing Director at funding.com.au, said that he was humbled by the nomination.
“funding.com.au’s recognition for its excellent contribution to the Australian fintech industry reinforces the strength of the brand in connecting with the community and engaging with its customers,” he added.
The winners will be announced on Thursday, 22 March, at the Sofitel Sydney Wentworth.
LINK TO AWARDS DETAILS:
You may be searching around for more information to know how to apply for asset finance, what is asset finance and what solutions are available. Our website will provide all the information you could possibly need to make the decision to apply for this form of cash funding.
So what is asset finance?
It is basically a loan secured over your asset for a certain period of time. Businesses of all kinds, start ups or established, can obtain this form of funding quickly to allow their business to grow or ease cash-flow. Assets can be anything however the most common type of asset finance is real estate and other high end valuables.
What is an asset?
In general terms, an asset is any positive resource or item of value. For asset finance, lenders look at hard assets like real estate, vehicles or equipment.
Who provides asset finance?
Private funders and non bank lenders usually provide loans secured over your assets. The banks often look at a lot of other criteria when assessing a loan application including tax returns and business plans etc. and it can become a big hassle. Whereas private companies mainly look at the security provided for the loan and your repayment plan.
When to apply for Asset Loans?
When you need fast cash for your business or for any other reason and you have security to provide for the loan, you are an ideal applicant for asset finance funding.
It may be that the banks will take too long (non bank companies can settle in days) or you have bad credit (private financiers will consider bad credit applicants) or if you only need the funds for a short period. This finance type can be an extremely useful tool.
Asset loans that relate to real estate security and high end valuables from lenders can provide urgent funding to borrowers without a lot of documents. You can use this form of funding for any purpose you desire whether it is used for cash-flow, equipment, expansion, commercial property purchase, pay debts, tax bills and so forth. The funds are often used to assist business grow, expand or get through a cash shortage.
Borrowers rarely go to a bank for asset loans, they take too long. They go to private or non-bank alternates. These companies can provide asset loans on a lo Doc basis and funds can be provided sometimes within days! This funding can be a great alternate or solution to main stream finance and can be extremely flexible to your needs.
What requirements do I need to apply for asset loans?
You need two main requirements:
You must have an asset security property (first mortgage, second mortgage or caveats are considered): and
You must have an exit plan or repayment strategy. This can be anything from sale of the security to refinance or cash flow.
There are other requirements however the ones above are key to applying.
In addition below is more information about asset financing…
The name is pretty straight forward, the basic definition of asset finance is funding secured over real estate or valuable chattels, equipment or other assets. Even if the banks said no, you may be eligible for a business loan using asset finance. It allows you to use existing assets to finance a business venture, provide working capital, expansion, start up costs, the list goes on.
Although any asset is eligible, real property or real estate is the most commonly used asset to secure a loan. You can use real estate held by the business or personal real estate such as your home as collateral, as long as you have equity in it. In order to secure a loan, lenders will generally lend to 65% to 70% of the properties value.
How can you apply for asset financing?
Every lending institution has its own application for asset financing. Innovative companies have fees and charges online, the ability to obtain quotes online, you can make enquiries through their website and the experience is hassle free.
Is asset financing expensive?
Asset finance is no more expensive than other short term loan solutions. Asset finance works when the cost of waiting for the financing outweighs the cost of the financing. It is more expensive than traditional bank loans but can provide a business with funding within days instead of weeks.
Different asset finance and loan companies have different application processes. A lot of information is coming online and you can usually enquire about asset finance solutions, obtain quotes and apply online.
How long do asset finance solutions take?
You generally can get an indication on whether you would be approved on a loan within hours of enquiring and the turn around time for funding is generally within days of formal approval.
Pros of asset finance.
Some of the reasons businesses decide on applying for asset finance solutions:
To release equity in their property and use it for financing.
It can provide funding to start a business.
It can provide funding for emergencies.
You can use the loan for large purchases.
It can offset the cost of running a business.
To finance a small business – using property as collateral can provide funding to start a business.
To renovate an existing structure – renovations are costly and asset financing can provide a lump sum you can pay off within a year.
To purchase inventory – inventory is sometimes sold in large lots for a lower price, so having the cash quickly can help you save money.
To buy equipment – large pieces of equipment can be expensive, but asset financing can help you buy them by letting you pay it off in instalments.
In case of an emergency – you may not have a large amount of money to fix something that suddenly needs repair in your home or business.
Asset Finance Australia Wide Online
If you need a loan to start a business, expand, purchase property in Australia, you want to consider asset finance Australia online as a lending option. It is the simple way to get the capital you need. Most lenders have information online. You can see if you qualify, get quotes, have queries answered and some even have applications online.
FAQs on Asset loan solutions.
How can I increase my chances of approval?
Security is a key concern for asset finance approval. Often the asset you are financing is required and depending on your circumstances, if this is seen as insufficient to secure the loan, further security may be required. A charge is secured over the asset and if this is not enough security a caveat or second mortgage is required over real estate.
What are lenders key criteria?
As we mentioned above it is mainly the security. Depending on the loan purpose will also alter what else is required. Asset loans can usually be customised and are very flexible to suit the borrowers needs. For example if you have an asset, need business finance against it and will repay in the short to medium term you can prepay the interest or pay the interest at the end of the term. Other times if your have the cashflow you can service the asset finance monthly or weekly.
What document are required?
These loans can be provided on a low document basis. In addition to the standard application and Identification documents, you will need details on the asset you are pledging (ie the rates notice of the real estate), an explanation on what you are using the funds for, what term you are after and how you will repay the loan.
Business asset finance – you need stock or cashflow for your business needs. You can put up real estate (first or second mortgage or caveat) allowing you to get the funding for your business and you can repay in 6 to 12 months.
Purchase equipment – you need 100% equipment finance for your business. You can put up the equipment as well as further security to purchase the equipment.
High end items – you have high end jewelry, watch, wine collection or art and need finance against it. There are options available to a certain loan to value ratio.
There are alternatives to asset finance for example unsecured business loans, mortgages or just standard business loans. However with these options you application is considered more on the business strength rather than the asset. If you can show your business strength or have real estate you can give a mortgage over, you have other options to asset finance.
If you are searching for a way to borrow money with poor credit history, bad credit finance is an available solution. Often called non-conforming loans, business loans, home loans or bad credit loans, bad credit finance is specifically designed for people with poor credit. Before you decide on a loan there are a few things you need to know about bad credit finance.
What is bad credit finance?
Bad credit finance is a form of financing for people with less than perfect credit. Loans from non conforming money lenders often cater to these types of borrowers. These loans are high risk for the lenders, so they often carry a higher price tag. This means that the interest rate on bad credit finance is often slightly higher than other loans from traditional lending institutions. The obvious reason to apply for bad credit finance is that you have made some mistakes in the past however want a fresh start to get back on track.
Pros of Bad Credit Loans.
This finance is often easier to get. Lenders are willing to take some risks when they are aware your credit is bad.
This type of financing can improve your credit. It sounds counterintuitive but as you pay off a loan, it can raise your Vedascore and ultimately improves your credit.
This type of finance may be the best way to lower interest rates. You can use bad credit finance to pay off higher interest rate loans and credit cards.
It can help with large expenses.
It can help with start up costs for a new business.
What types of loans for bad credit are there?
Personal loans – These loans are for an unspecified purpose, and they are usually used to make a personal purchase or another domestic reason.
Business loans – Business loans help businesses in need of an influx of cash.
Start up loans – These loans cover the start up costs of a business.
Debt consolidation loans – You can use these loans to condense existing debt into one payment.
Credit repair loans – Credit repair loans are easily paid back to repair a credit score.
How do bad credit loans assist non-conforming borrowers?
They allow borrowers who cannot access traditional forms of finance obtain funding for their needs. The banks do not cater to people with bad credit and typically decline them almost straight away without looking at the merit of the finance application. A bad credit borrower could have good income, good security but the credit default is just holding their application back. This is when you apply for bad credit loans with an alternate finance provider.
How do home loans bad credit work?
Most traditional mortgage institutions will look at your credit score before determining if you qualify for a home loan. If it even has the slightest mark, you are declined. When you use a lender that specialises in helping people with bad credit, you’ll have someone who will consider the situations that have affected your credit score. In some cases they may not even conduct a credit check. For example, you have poor credit because you had a bad period in the past, or you’ve recently had a divorce, or you’re just new to Australia, so you haven’t had a chance to establish good credit. Non bank lenders can look at these issues and often provide the funding you need.
Who can apply for bad credit loans home loans?
With private lenders your bad credit becomes less of an issue; however you need to satisfy a few other requirements. The first is you must have sufficient cash or equity to contribute to the deal. For example, bad credit loans are usually provided to 70 or 75% of the value of the real estate or security provided. Second, you must have an exit plan to repay the loan at the end of the term. At the end of the term, you need to have a plan whether you are going to sell or possibly be able to refinance by that time.
How to get started with home loans for bad credit?
You should seek approval for a home loan as soon as you want to start looking for a home to purchase or when you need the funds. This way you already have the process underway and know that you’ll be able to have the finance ready. If you’ve already found a home and was turned away from the banks for a traditional home loan, you can still turn to lenders with experience in home loans bad credit. The approval process is often quick, so you can continue the process of buying your new home without delay.
Why is a bad credit loan different?
Traditional loans often have lower interest rates and strict terms. Loans with bad credit have higher interest rates but far more flexible terms. This makes the loan more accessible to people, particularly people with bad credit. They can also be funded in days not weeks.
This type of loan is different from traditional loans because of the risk the lender takes. This risk makes the loan more expensive. What this means is a higher interest rate and higher payments. The advantage to borrowers is that they are able to get a loan when they otherwise wouldn’t be able to from a bank because of their less than perfect credit.
For security, you will need equity in your property or asset to get a bad credit loan or more cash to contribute to the purchase.
Examples what you can do with a bad credit loan:
Start a business.
Renovate an existing property.
Make a major purchase.
Expand your business.
Why do loans with bad credit have a higher interest rate?
Loans with bad credit are more expensive because they have a higher interest rate and carry higher fees. The interest rates on loans when you have bad credit are different from a bank loan because the lender has a higher risk. High risk lending costs more, it is that simple.
Why use loans with bad credit?
Bad credit lenders accept that you have bad credit.
They are an option when a bank has already turned you down.
They can help you start a business.
They can help with urgent funding.
They can help you with non conforming reasons.
What do you need to obtain loans for bad credit?
Most loans for bad credit use some form of collateral. This means that you must have equity in property to generally borrow up to 65% to 75% of the property’s value.
When do you need bad credit business loans?
Bad credit business loans are necessary if you have a poor credit score, but need capital to start a new business venture, or need revenue to expand. The funds can be used for any business purpose. These loans are fast and on formal approval funding can be provided in days.
Three reasons to apply for bad credit business loans:
You need capital, but your credit score is less than stellar.
You need finances for your business and quickly.
You have sufficient security to offer in the form of real estate.
Recap, when to apply for bad credit loans?
When you have been knocked back by the big and nasty banks; or
When you have a credit issue but have a good explanation; or
When you have good security for a loan.
Surfing the web for Bad Credit Mortgages can be confusing especially with the mixed information. This page will assist you to understand what bad credit mortgages really are and how they can benefit you. You will see that these types of mortgages can really be useful for borrowers with credit impairments.
What are Bad credit mortgages?
As the name suggests, they are mortgages for people with bad credit. Bad credit can come in many forms however it typically means adverse or poor history on your credit file. An adverse mark can be anything from an unpaid phone bill to a default on a major loan. It can also be for “part 9″ borrowers or ex bankrupts.
When to apply for Bad Credit Mortgages?
When you apply for a home loan with traditional lenders they are likely to conduct a credit search and if your credit is bad, they typically will decline your approval. This is where Bad Credit Mortgages come into the equation.
Who provides Bad Credit Mortgages?
Not banks, private lenders, alternate funders or credit unions. It’s mainly non-bank lenders and private lenders. They often look beyond your bad credit and look at other criteria including the real estate security provided for the loan, the repayment strategy and so on. Some private lenders will not even bother conducting a credit check. Each lenders have their own criteria.
Who can apply for Bad Credit Mortgages?
The key criterion is quite simple, you need to have sufficient equity in your property and you need to have an exit plan to repay the finance (The max loan you can usually get up to is normally 65% to 75% of the real estate value, this is known as the loan to value ratio).
With this style of loan, the normal loan terms are from 1 month to 24 months. Bad credit mortgages are not to be used as long term finance solutions as they are more costly than traditional types of funding.
What differences are there between bad credit home loans and conventional home loans?
There are a number of subtle differences between conventional loans and bad credit home loans. These are mostly due to the risks that the lender takes loaning money to a person with bad credit.
Bad credit home loans often have a higher interest rate.
The borrower sometimes needs more equity to qualify for a bad credit home loan.
The borrower may need to pay more for a down payment to qualify for a bad credit home loan.
Bad credit home loans are generally low document.
What should you do before applying for bad credit home loans?
You should obtain your credit report before applying for a bad credit home loan. If you know what your Veda score rating is, you will be better prepared for what to expect. Then you can start the application process.
What are bad credit mortgage brokers and lenders?
Bad credit mortgage brokers are very similar to standard mortgage brokers, only they specialise in mortgages for people with bad credit. Although the mortgage is similar, there are some differences between a bad credit mortgage and a traditional mortgage. Bad credit brokers will often send you to bad credit lenders and know the market better.
What can you expect when using bad credit mortgage brokers and lenders?
Bad credit is understandable.
More equity in the property is required.
You may need a higher down payment.
There’s a lower loan to value ratio requirement.
Most bad credit mortgage brokers want you to have a plan for paying the borrowed amount back.
You may end up with a higher interest rate.
There are many reasons people use bad credit mortgage brokers. People who have bad credit can still get a mortgage, but they need to go through a different type of broker or channel. If you pay the mortgage on time and in full, it helps rebuild your credit. This can make it easier to get a loan later. Large purchases, purchasing new property and starting a business all require financing. Bad credit mortgage brokers help with this financing.
Why consider a higher rate bad credit mortgage?
In some cases, a bad credit mortgage is the only way to purchase real estate or property. You may know you can afford it however your history is holding you back. It is important to remember that even this type of mortgage improves your credit when you pay on time and pay the loan off.
What are the advantages of a bad credit home loan?
There are many advantages to a bad credit home loan including:
Flexible documentation – Banks often require a lot of documentation, but with a bad credit home loan, you may not need as many documents in order to apply.
Property ownership – The ability to own real estate despite your credit rating.
Rebuilding your credit – Having a home loan and paying it off rebuilds your credit.
Chance to build equity – After you pay some of the loan off, you will have equity in your property.
What are the disadvantages of getting a bad credit home loan?
As we mentioned, there are a few disadvantages of bad credit home loans. Since the lenders takes a higher risk, they charge more. This makes the loan more expensive so you need to understand the rates and fees. A way to combat these expenses is to pay off your loan early, if it is only for the short term, it can be manageable. Another disadvantage of a bad credit home loan is that you need to put more money down or have more equity. It may not be the most desirable criteria, but it’s one that will make it possible for you to obtain a loan with poor credit.
Bad credit loans do not need to be stressful. Just because you have past issues doesn’t mean you will necessarily default in the future. You need to be able to show why a default won’t happen again.
How can I increase my chances of approval?
Be upfront about your history and do not miss anything out. If you know you have bad history list the bad credit or defaults, provide an explanation on each default and a reason why it won’t happen again. Maybe you went through unemployment or an illness etc. these situations are not uncommon.
What are lenders criteria?
Depending on how bad your credit history is and what the purpose of the loan you are applying, will depend on the criteria and also what options you have available. For example an unsecured personal loan is unlikely to be approved however a secured personal or business loan has much more of a chance given the lower risk to the Lender (some business loan products do not require a credit search at all).
What do they look for?
It is also important that your credit file is repaired or in the process of being repaird. For example a default noted as unpaid looks worse than a paid default and a outstanding judgement against you will not increase your chances unless you are in the process of paying these.
Divorce or sickness – you may have been through a divorce in the past and bills were unpaid given the stressful time in your life.
Adolescence – we have all been young and make mistakes. Perhaps credit was not your key priority or you are now more educated on credit.
Business cash-flow or start up capital- you have a good business operating or a good business plan however have been decline by the banks due to your past credit issues. With security, you can get a loan calculated on the value of the security property.
Bitcoin is increasing in popularity for many reasons. If you’re looking to buy some as an investment, make payments or collect payments learning all you can about it is important because it can be complicated at best.
How Bitcoin Started
An anonymous online enigma named Satoshi Nakamoto supposedly created Bitcoin. He or she devised an online currency or type of money in 2008 and released the open-source software in 2009. It enables people to transact online via a peer-to-peer system. The decentralised ledger recording the currency is called the block chain.
The Appeal of Bitcoins
Bitcoin appeal comes from more than it being a virtual currency. People are drawn to it because it’s not considered a form of currency by many governments, including Australia. The Australian Taxation Office says “Bitcoin is neither money nor a foreign currency.”
Bitcoin has had vast appeal to criminal organisations due to its anonymity and untraceable quality. This has led to concerns in many countries, but as of yet, it has not stopped the use of bitcoins.
Mining bitcoins involves highly sophisticated machines. Basically private individuals or companies provide their computing power and in turn are rewarded bitcoins. The amount of bitcoins to mine reduces as time goes on. There is a limit or Cap on the amount of bitcoin that will be available and they get harder to mine as time goes on.
Bitcoin as a virtual currency has been highly volatile. When it first started, it was barely worth anything at all. However, as more were mined and it was adopted into mainstream culture, it has become far more valuable. Just like money, bitcoin value goes up and down. Here is the price:
As already mentioned, you can mine bitcoins. You’ll need to connect to a server, and have specialized machines and software to do it. This can be a hefty investment, whilst most people find it to be one that is well worth the investment, it’s not for everyone.
The other way is to buy bitcoin. You can find people who already have bitcoins and buy them. This is usually done on a Bitcoin exchange.
The third way to get bitcoins is by accepting them when selling services and products. Many companies are accepting bitcoins as payment such as Reddit, Dell, and Microsoft. People, companies and business are using them, and every year that goes by more companies are accepting them as payment. As this virtual currency gains more traction, the value is intended to increase.
Before you get your coins, it’s important to set up your wallet. Your wallet will be your personal storage and organizer of the coins you have. It’s just like a bank account and you can use that wallet for bitcoin transactions. It’s usually all online, so you can access it no matter where you are in the world.
If you’re feeling excited about bitcoin, you are not alone. This phenomenon has taken the world by storm. The highs and lows are just like shares however it does have its risks, know these before getting started.
How to Get More information
The way to get started is to figure out how you are going to transact with bitcoins. You can find information about mining online. Try forums and exchanges to find people who are selling bitcoins. You can also use a bitcoin wallet, where you can use your bank account to buy them. Finally, you can simply accept them as a form of payment if you’re in business of selling products and services.
Getting into a business (or even personal) situation in which you need cash quickly never feels comfortable. You become anxious given the pending need. Banks often take too long or their criteria is quite over the top. Fortunately, with non bank money lenders, you don’t have to feel so anxious, there are solutions.
What are money lenders?
Non Bank Money lenders are companies who specialise in providing loans to those that need them and who can not access the banks for what ever reason it may be (lack of trading history, bad credit, lack of financials). They understand that people get into situations in which they need money quickly, so they are ready to review applications and provide money as soon as possible on approval.
Are non bank money lenders flexible?
Typical non bank money lenders do not require you to have perfect credit, perfect history, trading statements, perfect paperwork and so on. Even if you’ve been rejected from a bank, you can get approved from money lenders who look at your situation differently and in a flexible manor. Some can even customise loans suited to your needs.
What do you need to apply to non bank money lenders?
For secured business loans, money lenders usually have two key concerns. You’ll need a strong exit plan, which is a strategy of how you will pay back the loan you receive. They are short term loan solutions and will need to be repaid within1 to 12 months. You’ll also need sufficient security for the loan, mainly in the form of real estate or other high end valuables.
Where can you find money lenders?
Online is the best way to do your research. Key reasons to seek cash from non banks money lenders:
You need money quickly.
You don’t have good credit or the bank lenders rejected your application.
You want a short term loan.
Borrow Money the Right Way
Do you need a bit of extra money for your business? There are a lot of different lenders in the market including the banks, non banks, private lenders, mortgage funds and so on. In order to borrow money you need to know what type of loan you qualify for, read on below for more on how to borrow money from private lenders.
What does it mean to borrow money?
When you borrow money, you receive cash from a lender. The money is paid back over a period of time, usually in instalments or at the end of the term. The lender charges a percentage called interest on the amount borrowed. The money that you borrow is called the principal. You pay back both the principal and the interest on a loan.
Why do businesses borrow money?
Most businesses have good reason to borrow money. Some common reasons are:
Emergency cash flow – Emergencies and accidents happen, and borrowing money can help alleviate some of the financial stress they cause.
Starting a business – New businesses need financial help to get off the ground.
To establish credit – Borrowing money and paying it back shows loan companies that you are worthy of credit.
Funding large purchases – It is easier to make large purchases if you can pay them off over time.
How to Borrow Money for business
Most business lenders are online. You can borrow money by enquiring and applying online. The application process for a short term loan should be quick and easy. After you provide your scenario online applicants usually receive a response within hours.
Are you ready to buy or build a new property before selling the one you currently own? A bridge loan can help, read below for more information regarding this financial product and how to get started.
A bridge loan explained
A bridge loan enables you to purchase a home or have one built before selling an existing one. It provides the “gap” in funding between settlements of both properties. Once explained it can be quite a simple process.
How does a bridge work?
Although there a few variables depending on the particular real estate scenario a person is working on, the bridging loan lender will typically take security over both properties or just the current property until the sales process is completed for the existing home. Often at times, the bridging loan lender will then give the borrower a one to twelve month window to sell and repay the funds. If there is a shortfall or excess money, that is then it can be added to or subtracted from a small mortgage on the remaining security.
When do you need a bridge loan?
You’ll need a bridge loan if you want to buy or build a new property before selling an existing one. You will need to apply for this loan as soon as you want to know you have the funding to support what you want to do with the new property. In case you need to purchase a property quickly, it is ideal to get a pre-approval in place for this type of bridging finance or at least make an enquiry. A professional lender can usually provide a verbal conditional approval over the phone and funding within days of formal approval.
What are the pros and cons of a bridge loan?
As part of the bridge loan explanation we have simplified what the pros and cons are.
You can purchase property before selling other property.
You’re able to take advantage of good deals and opportunities.
You can act quickly when there’s a deal available.
You’ll be able to plan for the future when you can have the property you want now.
The interest rates can be high.
You’ll have to pay the bridge loan back within a short term.
You may have a situation in which you can’t sell your first property before the bridge loan is due.
Basically the end result is – the interest rates can be high, but at least you’ll be able to get the loans you need.
What else do you need to know about a bridge loan?
As previously mentioned, bridge loans can be delivered in a matter of days depending on who you go to for the loan. Some lenders can take weeks to approve your application and provide the funding, while others can provide approval within hours and money within days. This is an important consideration when trying to make a deal happen. When looking for bridge loans, make sure that you are asking how long the approval process takes and how long it will take to get funding once approved.
Frequently Ask Questions about Bridging Loans
When do I start applying for a bridge loan? Start as easily as possible. Do not hesitate as it could mean you run into default under a contract or miss an opportunity.
How long does it take to get it? For some lenders, you can find out if you are approved for the loan within a couple of hours. You can get funding within days.
How do I know I can get one with my credit? Some lenders are okay with bad credit and others do not even complete a credit check. The best approach is to be honest and ask before applying.
The term bridging finance relates to an urgent funding need to bridge a gap between a shortage. You might find yourself in this position so it is important to know the ins and outs of bridging finance and that it can be a simple financial product to apply for.
What is bridging finance?
As we touched on before it is to bridge your current situation. You need funding now or immediately and you have a pending repayment plan. The most common type of bridging finance is when you have bought a new property before your current property has sold. That being said, this type of finance product can be used for many other purpose including business.
Who can get bridging finance?
Two key requirements include:
There has to be a property with sufficient equity in it. Equity is the unencumbered value in the property. Most bridging lenders will typically lend 65% to 75% of the property’s value.
There has to be an exit plan or exit strategy to repay the loan.
When would you get bridging finance?
You would utilise bridging finance when you need immediate cash and you know you can repay it in the medium to short term. Some reasons include:
- You need to settle on a new property before you have sold/settled on your current one.
- You need to pay at debt to the ATO or a creditor and you have a good exit strategy to repay the bridging finance.
- For your business cash flow
- For completion of construction.
The above are just some of the reasons borrowers obtain bridging finance. This style of finance can be more costly than normal bank loans as they are urgent however the cost of you not taking action outweighs the cost of finance.
Bridge Loans: a different perspective
You’ve found a great opportunity to buy a new property. There’s only one problem, you haven’t sold your current one. As much as you want this new property, traditional lending institutions are hard to deal with. Before you turn away from the possibility of a new property, consider a different lending source.
Five reasons to get bridge loans from a non bank funder:
- You want to buy a property before selling the one you already own.
- You have bad credit, so you can’t get another mortgage for a second property.
- You need help with financing when trying to buy a new property.
- Bridge loans can be easy to qualify for with non bank lender.
- Bridge loans help you take advantage of great opportunities for new property.
Why do people get bridging loans and not use the banks?
Bridging loans are utilised when borrowers cannot wait for traditional forms of finance. Banks can take over a month or two to fund a loan, where a bridging loan lender can fund a loan sometimes within days.
How expensive are bridging loans?
The idea behind this style of loan is that the cost of waiting is greater than the cost of a bridging loan. They can be more expensive than traditional bank funding.
How Does a Bridging Loan Work?
You might be thinking “How does a bridging loan work?”. Originally bridging loans help people fund the purchase of a new property whilst selling an existing property. These days they can be utilised for any form of short term funding requirement.
It can also be used for any short term funding requirement including buying stock, paying an ATO debt, expansion, cash flow, working capital and so on.
Bridging loans are often utilised by people who have already signed a contract to then hear the bank decline them. They have good strong equity or cash to provide but the banks can not act quick enough or require too much paperwork.
The right bringing loan lender can provide cash in days of formal approval. Loan terms are generally between 1 to 12 months.
Now we have answer How Does a bridging loan work, below are five reasons to utilise them:
- You need funding fast to settle on a property.
- You only need funding for the short term.
- You can’t get approved by other lending institutions quick enough.
- You want a fresh approach to lending, so that you can do everything online or over the phone.
- You want verbal approval within hours and money within days of approval.
Why don’t traditional lending institutions provide the best bridging loans?
Australia has many lending institutions that provide bridging loans. They don’t all provide quality service though. Finding the best bridging loans is important when it comes to buying a new property.
When you’re purchasing a new property without selling your existing one, you need a lender that understands your financial situation. Many traditional lending institutions make it difficult to get a bridging loan because they rely heavily on credit and assets. This can make getting the funding you need for a new property stressful and time consuming. Luckily, lenders who have a fresh approach to bridging loans can help you.
How can I increase my chances of approval?
The best tip to applying for bridging loans is to have a strong exit strategy and have your supporting documents ready. An exit strategy is, as we mentioned, the plan on how you will repay the loan during the term. Sometimes you have one of your properties sold and settlement is pending. Other times things may not be as simple.
For example if the property is to be sold you can perhaps provide the real estate agents appointment agreement and the listing details to show to the lender your exit strategy. If you are expecting a lump sum to be received in order to payout the bridging finance show evidence of this (ie perhaps it’s a business agreement or invoice, you can provide these documents).
If your exit strategy from the bridging loan is a refinance, evidence of your ability to refinance is often needed and who you intend on refinancing with.
What else is important when applying?
Bridging loans are obviously short term loan solutions and are often required on an urgent basis. Typically they are required within days because another form of finance or funding will not be ready in time. Sometimes they are even done without a valuation so security for the loan is important. Non bank bridging Lenders usually lend to 65% to 70% of the property value and can do so on an urgent basis provided sufficient details are provided regarding the security property.
Security- often bridging finance is secured by a first mortgage however in some cases it can be a second mortgage or a caveat over the real estate.
How do Bridging loans for business work?
Bridging loans have a broad use and can be used for business before a company secures permanent finance or achieves the sale of an asset or stock. The same principles apply for business bridging finance as above (ie a an exit plan and security).
Property transaction- a property owner has sold their property and bought a new one. The new one settlement is before the old one leaving a gap or shortfall in funding for a month or two.
Business owner -a company requires urgent finance to buy stock for a busy period and the owner intends on selling his or her real estate to repay the loan or intends on repaying the loan via profit from the new stock.
Developer – has purchased land at a great however settlement is in a day or two and the long term finance they arranged is not going to be ready for settlement in time.
Given the short term nature and the urgent need for bridging funding, there are limited alternatives. Unless some other form of short term funding is available or a family member can lend you the required funds, the only other alternate is usually not to proceed with the transaction. However in most cases the cost of not proceeding is more expensive than proceeding (ie. Deposits are forfeited or business opportunities are lost).
Are you ready to buy property without selling your existing one? You may want to use a bridging loan calculator first to see what rates and charges apply and how much you can borrow. Below is more info on this type of secured finance from non bank finance companies.
What is a bridging loan calculator?
A bridging loan calculator helps you calculate how much you can borrow as well as how much it will cost you per month or in fees and charges for the bridging loan itself. By inputting or providing information such as your available cash, your first mortgage, the properties values and the number of months you need the funds for a bridge loan calculator will be able to estimate what your total monthly obligations will be for your bridging loan and the anticipated loan amount.
What are bridging loan rates?
The rates for a bridging loan do vary slightly from lender to lender, but bridging rates are often comparable to the urgency of the situation and can often be more expensive than standard bank loans. Bridging loans are structured as interest only loans until the loan is repaid, usually via sale of a property. Commonly lenders are willing to work closely with you during the process of obtaining a bridge loan to help structure a bridging loan rate that is right for you.
When do you need a bridging loan calculator?
This style of funding is often unexpected and urgent. You need a bridging loan calculator when you want to buy a property before you’ve sold your current one. A bridging loan will help you finance the amount you need to purchase the new property making it possible for you to complete the transaction.
Four reasons to use a bridging loan calculator:
You are considering a bridging loan to buy a new property before selling an existing one.
You want to know about how much your monthly obligations will be with a bridging loan.
You would like to calculate the cost of a bridging loan.
You would like to compare offers from bridging loan companies.
All About Bridging Loan Rates
Like most loans, bridging loans come with an interest rate. It’s important to understand bridging loan rates before you decide to move forward. These loans are secured via real estate, below will discuss the solutions offered by non bank funders.
Why is it important to know about bridging loan rates?
As we said, bridging loan rates do vary between lenders and there can often be a large difference between the most expensive and cheapest and it’s important to research them. You always want to find the lowest interest rates possible because it saves you money however the lower the rate the harder to qualify.
Key reasons to use a bridging loan:
You need urgent funding;
You need short term finance;
Banks can not help;
Bad Credit and no financials are ok.
Bridging Loans Explained: What You Need to Know
You may need a bridging loan if you want to buy a property before you sell a current one. These finance arrangements are secured over the property and “bridge” the gap between.
What happens to a bridging loan after the sale of the first property?
Once the first property sells, the funds from the sale are used to pay off the bridge loan. The new home is then left unencumbered or only a small portion to be refinanced to a standard home loan.
Why should you care about bridging loan interest rates?
The higher the interest on a bridging loan, the more money you’ll have to pay. You don’t want to pay more money than you have to, so that’s why it’s important to compare bridging loan interest rates as you are looking around to get a loan. The key philosophy behind this type of finance is, the cost of the loan is to be put in context with the cost of missing out on the new property or opportunity. One must outweigh the other.
What if I have bad credit or no financials?
Bad credit or lack of financials is usually not considered a determining factor when lenders consider a bridging loan application. It is mainly based on the security values and the exit or repayment strategy.
What are the pros and cons of bridging loan rates?
The pros of bridging loan rates is that you able to prepare for them when you are securing a loan. You will know exactly how much you’ll have to pay due to the addition of the bridging loan rates.
The cons of bridging loan rates is that they can be high, which can make it more difficult to afford a loan.
When you need a business or commercial loan, one of the most important things you must consider is what type of solution you are after and how it affects the rates you pay. Learn why it’s important to know about business loan rates below by reading on further.
What are business/commercial loan rates?
Business loan rates are percentages of interest you’ll have to pay on business loans. Business loans come with an interest rate that you’ll have to pay on the amount you have borrowed. Most of these loans are interest only and you repay the principal at the end of the term.
Why are business loan rates important?
Different lenders have different fees and charges. And depending on your situation, depends on what lenders will approve your application and are suited to your needs. Obviously when business loan rates are high, you end up paying more. However, if you only need a short term loan, a high interim rate may be viable. Long term solutions often have lower rates however will likely come with early repayment penalties. It is all about finding the solution best suited.
How can you find low loan rate?
The Internet is a great tool to use to compare business loan rates. You can ask for quotes and research rates right from the comfort of your home or office. One of the best places to get a low business loan rate is right here on this website.
How does my credit history or trading history affect my business loan rates?
The simple answer is it does affect it a lot. If every borrower was suited to the banks, there would be no need for alternate non bank lenders. However the banks are often not suited to everyone, either they are too slow, want too much paperwork, can not asses you loan property or understand your objectives. Its about finding a competitive rate best for your situation.
What is the difference between a business and commercial loan?
A commercial loan is a type of loan that is utilised for any commercial or business purpose. Private and non bank financiers will provide you with a commercial loan and take security over your real estate security to better secure the funds. These lenders are far more flexible than the banks, assist on a low doc basis and funding can be obtained urgently.
Why consider a commercial loan?
Whether the banks are going to be too slow, you have bad credit, no financials or it may be you need bridging funds. A commercial loan can be an effective financial solution providing the funding aid you need and eliminating the thought of having to apply to the banks.
What do you need for a commercial loan?
There are many private lenders that can provide a commercial loan for business to borrowers who might not qualify for a conventional bank loan from traditional banks. However, they generally require two key criteria to be satisfied prior to looking at your funding application. The first item is you must have sufficient real estate property to provide as collateral for the loan. This is important as the lender mainly assesses their risk based on the security. The second is you need a legitimate exit strategy to display how you intend on exiting the loan and repaying the funds.
Business loan interest rates can be:
Interest and principal.
How to find out business loan interest rates?
Lenders and funders generally provide quotes on their business loan interest rates once they understand your business’s needs and their risks in lending to you. Some providers clearly display their set or fixed business loan interest rates on their costs page so they are clear right from the start. As we mentioned non bank private lenders are more expensive than your traditional banks however the cost of not obtaining funding often is greater than the cost of the funding. Private lenders can provide finance in days not weeks and the loans are usually for a short term (ie. 1 to 12 months).
Secured Business loans, do you qualify?
Find out if you qualify for a loan and get a fast, obligation free quote.
How can you apply for a commercial business loan?
It’s easy to apply for a business loan, its best to get a quote and see if the lender is likely to be able to help you.
Three reasons to pay attention to business loan rates:
Business loan rates vary among lenders;
Business loan rates increase and decrease;
Low rates is not alway the best solution suited to you.
Why accept the higher business loan interest rates from non bank lenders?
As we mentioned, most borrowers who go to private lenders and consider their business loan interest rates usually have their reasons. They include:
The banks will be too slow.
The banks have declined their application.
They need the funding urgently.
They have bad credit.
They only need the funding for a short period of time.
They require a low document solution.
How does credit rating affect business loans rates?
Credit rating affects commercial loans interest rates by showing the lender how risky it is to lend money to a company..
Good credit rating – this means you pay your bills on time and possibly paid a loan off. Good credit means that you are a low risk and are likely to have a low interest rate.
Bad credit rating – a bad credit rating means you made some mistakes and possibly are behind on a few things. Bad credit means that you are a high risk and are likely to have a high interest rate.
No credit rating – no credit rating can be both bad and good. No credit means that you have never borrowed money and therefore have not proved yourself financially. This means that a lender will have to look further before determining your interest rate.
It is important to note that credit rating is just one factor that affects business loans interest rates. Bad credit does not guarantee a higher loan rate.
How does collateral affect business loans interest rates?
Having a lot of collateral can help lower a commercial loans interest rate. If you have equity in property or equity in an existing business, you can use it as collateral to lower business loans interest rates. Collateral and equity in property can be used to secure the loan. This can be inventory, real property, or personal property.
How much are business loans Australia?
Business loans Australia from non bank financiers are more expensive than traditional bank lines of credit. This is mainly due to the fact they are short term loans and they are often provided on an urgent basis (within days of approval).
If you’re looking for business capital you’ve come to right place. Our website will provide all the information you need on business capital and how you can got about applying.
What is business capital?
It’s a form of funding provided to a business for any related purpose. It’s most commonly used for a start-up, expansion or cash flow and is used to take a business to the next stage of its life cycle.
Who provides business capital?
There are many different sources including banks and non-bank lenders. Banks are quite strict with their requirements and often without trading history, financials and strong income evidence the banks will decline applicants. This is where non-bank funders come into the equation; they can provide fast, hassle free business capital.
Why get business capital?
When you need funding quickly (typically within days); or
When you need funding for a short term period (1 to 24 months); or
When you don’t have the paperwork to go to the banks; or
When your credit history may not be squeaky clean.
This style of business capital can be extremely flexible and can often be customised to suit your business needs.
When can a business apply for business capital with non-bank funders?
Business Capital can be separated into two areas, secured and unsecured.
For secured business capital, amongst other things, you need two main prerequisites:
Real estate security for the loan. Sufficient equity in your property is required as the lender looks to the collateral for the loan rather than the merits of the business.
A repayment strategy. The business capital is to be repaid at the end of the term. Common ways to repay are from selling the property, refinancing or from cash flow.
Unsecured business loans usually rely on the business turn over and the business merits.
Frequently Asked Questions about Business Capital
What exactly can you use business capital for?
Businesses use capital for anything pertaining to starting a business, maintaining a business, or day to day business operations. This includes advertising, starting a business, hiring, legal expenses, inventory, lease or purchase of property, renovation, and purchase of supplies, vehicles, and equipment.
What don’t you use business capital for?
Business capital is not used for personal expenses, personal loans, home purchases, home renovations, or anything else that is not specifically business related. Speak with your loan officer to find out if your expense qualifies as a business expense before applying.
Who uses business capital?
Any business owner with a need for capital uses business capital. In addition, people who are starting a new business, have an idea for a business and need to develop it, or are expanding their business use business capital.
What are non-bank funders?
Non-bank funders come in a variety of styles. There are short term lenders who only lend money for a short period of time, usually at high interest rates. Bad credit lenders who specialise in lending to businesses with less than perfect credit. Long term lenders who offer loans that are paid back over a long period of time. These lenders usually offer lower interest rates. There are also lenders who offer multiple types of loans to businesses of all types. It is important to pick the type of non-bank funder that works best for you.
If you are looking for information on getting a business equity loan, you came to the right place. A business equity loan helps you grow your business or even get it off the ground. Getting a business equity loan does not have to be a difficult or a time consuming process. If you know what a business equity loan is, how to calculate business equity, and what you need to get one, you will be ready to apply for a business equity loan.
What is a business equity loan?
A business equity loan is a loan against the equity in your property for business. Lenders use equity as collateral to secure the loan and to offset risk. You can use a business equity loan for any type of business project such as renovating, improving inventory, or making a large purchase.
How do you calculate equity for loan?
The easiest way is to find the equity in your business is by following these steps.
Add all of the loans and liabilities relating to the real estate.
Subtract the above amount from the value of the real estate.
If it is a positive number, you have equity in your property to use for your business, so you may be eligible for a business equity loan.
Once you understand you have equity in your property, you can apply for a business equity loan.
What are the pros and cons of a business equity loan?
Like all loans there are pros and cons of obtaining a business equity loan. It is important to examine these pros and cons before utilising the equity in your business.
The pros of a business equity loan will vary depending on the type of business you have. Some of the pros are:
Cash on hand – Many businesses use a business equity loan to get cash on hand. This gives businesses cash for making purchases, renovating, hiring, covering startup costs, or covering any other cost associated with doing business.
Paying down other debts – Some businesses use business equity loans to pay off or consolidate other debts. If your business has several different loans with several different payments, you can use a business equity loan to consolidate all of them into a single payment to cut down on confusion.
The cons of a business equity loan will also vary depending on the type of business you have. Some of the common drawbacks or cons are:
You use the equity you’ve accumulated.
It encumbers the business.
Would you like to start a new business? Do you want to grow the one you already have? How about pay off business debt? You can do all of these things with a business finance broker on your side to obtain a business loan.
What is a business finance broker?
A business finance broker can explain financing options for your business. They can help you get the cash you need, when you need it. Business finance brokers are specialists who have relationships with a variety of business finance companies. If you are starting a business or have an existing business, then working with a business finance broker can help you find the right financing for your business.
How can a business finance broker help you?
A business finance broker will ask questions to understand your financial needs. Once an assessment has been completed, he or she will get right to work finding the best financing options for you.
When do you need a business finance broker?
You can start looking for a business finance broker as soon as you find yourself in need of money or funding. It’s a good idea to start early because this way you’ll have plenty of time to decide which financing options are best for you.
Where do you find a business finance broker?
A business finance broker can be easily found online. They can take all the information they need from you through the website or via email. It’s also possible to discuss your finances with a business finance broker over the phone and handle paperwork via post.
Five reasons to work with a business finance broker:
Business finance brokers understand your financial needs and can quickly deliver solutions.
Your company has expansion opportunities that demand quick cash.
You would like to start a business and want to know about finance options.
You have poor credit, so you need a lender that understands you need another chance.
You want to apply for financing online because it’s quick and easy.
Secured Business loans, do you qualify?
Find out if you qualify for a loan and get a fast, obligation free quote.
What are the pros and cons of a business finance broker?
The pros of a business finance broker are that they can make it really easy to get the finance that you need and they find you best loan terms. They do all the “leg work” and try and make the application process as stress free as possible.
The con is you could possibly waste your time choosing the wrong business finance broker. This can be disappointing, so make an informed decision by looking at their reputation in the industry and their track record.
A business finance broker can help people who have bad credit history. They know where to turn to for a loan for people with not so great credit because they have good relationships with lenders.
What loans can a business finance broker arrange?
You can do many things with the money arranged through a business finance broker, including:
You can grow your business by purchasing a new location.
You can start a business by purchasing the equipment you need to get started.
You can pay your business debts.
The possibilities are not limited to the above and there are options for any general business purpose.
Business financing can help with any related business purpose. Whether it is to start, expand, growth or provide cash-flow, it allows businesses to get to that next level. Find out all about this type of business financing below, so you can decide if it’s something that is suited to your needs.
What is business financing?
It is quite simple, business financing provides cash to business owners. If you’re a business owner dealing with debt or you have some expansion opportunities requiring additional capital, business financing is probably going to assist. In addition, if you are looking for capital to start a business, then business financing can provide you with a variety of options.
What does business financing do?
Business financing can give you the money you need to use to get your business out of debt, grow your business, or start one. It’s best to know your business goals before you apply for business financing. This way you’ll know exactly what to do with the cash when it goes into your account.
What do you need to apply for business financing?
This page discusses business financing from alternate companies who require security. These types of loans are extremely flexible and often customized as opposed to dealing with the banks. These lending companies will typical lend up to 65% to 70% of the security property provided and you will usually require a good exit strategy as they are for the short to medium term (1 to 24 months). Different lenders have various other requirements however the ones mentioned above are key.
Secured Business loans, do you qualify?
Find out if you qualify for a loan and get a fast, obligation free quote.
Where do you find business financing?
Online is right place to get started. You can usually view lenders fees, criteria and application and you can also enquire whether you are likely to be approved.
5 reasons to use business financing from non bank lenders:
Your business has cash flow needs.
There is a business opportunity that requires quick financing (in days).
You would like to start a business.
You want an easy way to secure business financing that doesn’t take a long time.
You’ve tried to get financing from a bank or you have bad credit or lack of financials.
What are some common types of business finance?
There are many types of business finance including:
Short term business loans – these are loans that are usually due within a year. Businesses use these loans for a quick influx of cash or to make a purchase quickly.
Long term business loans – these are loans that are due up to 30 years after origination. These are used to finance large purchases such as a location, expansion, or equipment.
Business equity loans – these loans use existing equity to finance purchases. Equity loans use the value of the property as collateral or security. You can use either business equity or home equity to secure an equity loan.
Inventory loans – these are loans that use a business’s inventory to secure the loan. Much like equity loans, inventory loans are great for when you need security in order to receive a loan.
Startup loans – these are loans specifically used for starting a business or startup costs.
Low doc or no doc business loans – these loans require little to no documentation. If you are self-employed, retired, or have an alternative means of income, these are great business finance choices.
Bad credit business loans – bad credit loans specifically cater to people who have poor credit. For a higher interest rate, lenders offer back credit loans for businesses.
Business mortgages – similar to a home mortgage a business mortgage is a loan for the purchase of property. Business mortgages use the property for as collateral.
The type of business finance you choose depends on the type of business you are in and your needs. Each type caters to a specific need or individual. This is why it is important to first decide what your business needs the loan for and then decide on which type of loan is best.
Business Lending is a great way to get the finance you need for your business or company. Does your business need funding for expansion, growth, to pay a debt or perhaps a special project? It may even be that you need it to start your cash flow. Lending institutions offer many financial products, below discusses business owners short-term financing options.
What is short-term business lending?
This is a special loan designed for businesses in need of extra funds. They are extremely quick and you can have the funds in days of formal approval. It can help start a new business, cover the costs of a project, upgrade equipment, supplies and hardware. The possibilities are endless. However, unlike a traditional business loan, which is typically for a longer term, short-term business loans have a shorter repayment period of up to 12 months. Therefore these loans also require that you have a strong exit plan (ie. sale of stock, refinance or sale of security property) to ensure you’re able to fulfill the loan terms and repay on time.
How does short-term business lending work?
Short-term business loans allow you and your business a certain amount of cash to cover a necessary expense. As we mentioned, many short-term business loans mature in one year or less. Once you receive the loan, you will need to use the money to benefit your business. This form of business lending is secured over real estate, is interest only and at the end of the term you repay the principal. There are secured and unsecured options. The security is usually in the form of real estate property, and is secured by way of mortgage or caveat.
Four reasons you need business lending:
You need money for business debt.
You’re looking for a way to grow or start a business, but you don’t have the cash to do it.
You have bad credit or no trading history and can no use the banks.
You want a short term funding option that will help you get your business back on track or start a business.
Secured Business loans, do you qualify?
Find out if you qualify for a loan and get a fast, obligation free quote.
Frequently Asked Questions About Business Lending
What is business lending?
Business lending is the practice of lending businesses money for a variety of reasons. These reasons can be expansion, renovation, purchases, or to just cover start-up costs.
What are the different types of business lending?
Short term lending – lending over a period of months or a year, used for a quick cash influx.
Long term lending – lending over a period of years, used for major purchases such as startups or business property.
Low or no doc lending – lending that requires little to no documentation. This type of lending is usually used for those who have difficult to verify income such as self-employed business owners.
Inventory lending – this is lending using your inventory as collateral or security. Business owners use this type of lending for a variety of projects. Inventory loans are mostly short term loans.
Equity lending – This type of lending is normally used for those who are new or who have less than perfect credit. It uses equity in property to secure a loan.
Equity line of credit lending – this is similar to equity lending in that it uses equity in property to secure a loan but in this case, the credit line stays open. You pay amounts off regularly and you can continue to use it as you would revolving credit.
What are the advantages of business lending?
One of the advantages of business lending is that it gives you cash for starting a business or continuing one. It provides money for expansion or you can use it to save a business that is in trouble.
What are the disadvantages of business lending?
The main disadvantage of business lending is that it puts the business in debt. This debt is paid off over time.
When you need to get a business loan, it’s wise to use a business loan calculator. The benefits are worth considering and you’ll be glad when you know exactly what to expect from your loan. Read on for more on a business loan calculator.
What is a business loan calculator?
There are various types of calculators. The most common business loan calculator computes what you can borrow. It assesses this based on a loan to value ratio of the property value you input.
However, there are other calculators that show what you need to pay monthly after you receive the loan. It takes the borrowed amount, interest rate, and the length of your loan term to tell you what you’ll need to pay monthly. Most business loans are interest only so it can be very simple to do on a normal calculator.
What’s the benefit of a business loan calculator?
The benefit of a business loan calculator is that you will know if you can afford to borrow the funds you need and you know what you are up for right from the start. With interest rates, you may not be able to pay the monthly cost, which would put you in a financial crisis. Planning for loan repayment is always a wise thing to do.
How do you pay interest on a business loan?
There are many options on how the interest payments are structured. They include:
Monthly in advance
Monthly in arrears
Prepaid for the term
Paid at the end of the term on discharge.
Where can you you find a business loan calculator?
Online, many websites have this function available. However sometimes the best way to understand what you can borrow and how much it will be is to contact the lender directly. After you use the business loan calculator or understand the costs, you can then consider applying for a business loan provided it is viable.
Key reasons to use a business calculator:
1. It helps you financially prepare for a loan.
2. You can see how much money you can save with different interest rates.
3. You’ll be able to see how much you can afford.
4. You can budget effectively.
What are the pros and cons of a Business loan calculator?
The following are some of the pros and cons of a bridging loan calculator.
You will have an idea of how much money you will owe.
You will be able to plan for the repayment of your loan.
Deciding if you can afford a loan will be much easier.
The bridging loan calculator isn’t always accurate.
Lenders vary and often quote on a case by case basis.
The situation may change, which can confuse you.
You may enter in the wrong information.
What’s important to understand is that a bridging loan calculator gives you an estimate of what you may end up paying. It’s not exact. You should always talk to your lender when you are getting a bridging business loan to find out what your rate will be and how much your payments will end up being when you receive your money.
Frequently Asked Questions about Business Loan Calculator
Are they easy to use? Yes, they can be easy to use. Just input the amounts required into where each field asks for information and then press calculate to get the amount.
Are they accurate? They are accurate, but you may find that it will be off a little depending on the terms of your loan.
Why should I use a bridging loan calculator? You should use one just to have an idea of what you can expect when you get your loan.
Scouring the web for business loans? You may be asking who is the best lender, what’s the difference between these loan names, are they easy to get and so on. This page will assist you with applying for the easiest type of business loans, one from a non-bank funder.
So what are business loans?
They are a form of funding used to assist business. They can be used at any stage in the business life and can be for anything related to your business i.e. start up funds, working capital, to pay creditors, expansion and so forth.
As the name suggests, it’s a loan obtained for business purposes. “Business purposes” can include a wide range of uses however we can define it as anything but personal finance. It can be for start-up funding, capital, cash flow, commercial mortgages, equipment and so on. The funds are usually secured by a first or second mortgage or caveat however unsecured options exist in the market.
Who provides business loans?
As we said, this page is about business loans from non-bank lenders and funders. These private providers are flexible, can assist with funding in days and can often customise loans to your needs. They usually do not require tax returns, trading history and can consider bad credit applicants.
Why use business finance?
If you need business funding quickly and can’t go to the banks try a non-bank funder.
If you want short term business finance try a non-bank funder.
If you have bad credit try a non-bank business funder.
What is business finance Australia?
If you’d like to start a business in Australia or are looking for financing to resolve your business’s cash flow or expansion needs, then chances are business finance is what you’re seeking. Business finance provides cash to business owners to take care of their cash flow needs.
How does business finance Australia work?
When you need money, you can generally apply for it quickly and easily online. You’ll need to provide information on your business, security for the loan, your repayment plan and then you will be well on your way to getting the cash you need. Security is usually a mortgage or caveat over your real estate however unsecured options are available. Once you obtain the funding, it can be used for your business needs and repaid over the term of the loan.
Secured Business loans, do you qualify?
Find out if you qualify for a loan and get a fast, obligation free quote.
How does a new business loan work?
When starting a new business, you need funding to get your business off the ground. For many businesses, supplies, equipment, and advertising are short-term expenses. If you do not have means to pay for these straight away, you likely need to apply for a short-term business loan. These loans help new businesses with the initial expenditures as the business grows. These loans are different from long-term loans in that you repay the loan within a month to a year. This means you are not committed to a lending institution for a long period of time.
When to apply for a new business loan?
Once you’re committed to starting or growing your business, applying for a business loan should be one of the first things on your priority list. You will need the money to begin purchasing the necessary items and advertising and so on for your business to succeed.
While it may take many weeks for a loan to go through with a traditional lending institutions, you can receive funding within days of approval with non bank lenders. The sooner you get your business off the ground, the sooner it will become profitable. With private lenders, things like trading history or credit issues are often overlooked.
What do people use a business loan for?
There are many reasons why a business needs a loan. for example:
You want to expand a business.
You need to make a large purchase of equipment or inventory.
You need to fund advertising.
You need startup costs for a new business.
Your business needs a new lease or property.
There are many other reasons but these are the most basic ones.
How do lenders decide who is eligible for a business loan?
Most lenders have factors that they take into consideration when someone applies for a business loan. The majority of lenders generally consider credit rating, collateral, business plan, and exit plan when deciding to approve or deny a loan application. None of these factors alone are responsible for the lender’s decision. For example, a business owner can have bad credit and still receive a loan. These factors are just a guideline for borrowers.
When can a borrower apply for business loans?
For non bank funders, you should have at least the following:
Sufficient security real estate: or
Strong cash flow; and
An exit repayment strategy.
As these non-bank lenders look beyond the traditional bank criteria, to provide business loans they require security in the form of real estate. These business loans are secured by a first mortgage, second mortgage or caveat depending on the loan.
The next requirement is in relation to how you intend to repay the loan. Will you sell the security, will your refinance or maybe you will have the cash flow. Whatever it is you just need to be able to explain it. Loan terms are typically between 1 and 24 months.
Five reasons to apply for a new business loan with a non bank fund:
You need funding for your new business.
You need quick approval.
You need money within days.
You need a trusted company that serves people Australia wide.
You’re ready to take your ideas and turn them into a successful business.
A term that often comes up when you are applying for a loan is capital finance. When starting a business, you need to know what capital finance is, how to qualify for it, and how to apply.
What is capital finance?
Capital finance is the money that you use for start up costs or business capital. It can be used for inventory, purchasing, renting, leasing a location, advertising, equipment, or anything else associated with starting or running your business. Most people borrow this money in the form of capital financing.
How do you qualify for capital finance?
Each company has slightly different criteria for qualifying for capital financing. There are secured and unsecured options each with very different criteria.
Amongst other items, for secured capital finance, non-bank companies generally require two key requirements:
You must have security or equity in your property (loans are generally provided up to 65% to 75% of the property value);or
You must have sufficient cash-flow; and
You must have a strong exit plan (repayment of these loans are typically within 1 to 24 months).
If you were turned down by a bank before or if your credit is bad, non bank finance companies can often assist with capital finance in a less stressful manner. Although this type of short term capital financing has a higher rate than bank loans, they are easier to qualify for.
Lenders who provide unsecured option rely heavily on the cash flow and performance of the business.
How do you apply for capital finance?
Applying online is the best approach. Capital finance lenders have all their information online and you can ask questions and obtain quotes. You simply fill out a scenario form online. You can generally receive a indicative approval within hours and once formally approved, you can receive funding within days.
Reasons to consider capital finance
Although there are many reasons to consider capital finance, here are just a few:
Money for start up costs such as advertising, location, and inventory.
Money for purchase of property.
Money for renovations in an existing business or property.
Short term financing for unexpected costs.
Working capital for expansion.
What are the pros and cons of capital finance loans?
As part of the capital loan information you should know the pros and cons in applying. The pros of capital finance loans is that they are usually easy and quick to obtain, provided you use a non-bank lending institution.
The main con of capital finance loan is that it can come with high interest rates.
Key facts of capital finance?
You’ll hear a lot of myths about capital loans, so it’s good when you can know the facts are. Business capital finance loans are a good thing that help a lot of people and businesses. However, they should be used correctly and paid off on time.
Frequently Asked Questions About Caveat Loans
How long does it take to get the loan? It shouldn’t take more than a few days.
What if I don’t have a lot of documentation because I am self-employed? That’s okay for low doc lenders.
Will I be able to use the loan any way that I wish? Yes, provided it is for business purposes.
Caveat lenders provide a type of loan that can bring quick financial aid within a few days. The only thing you have to worry about is searching for reliable caveat lenders from the vast choices you have on the Internet. This article will help you to understand what these loans can offer borrowers and where to find reliable caveat lenders to help you in your financial emergencies.
What role do Caveat lenders and firms have?
Caveat lenders provide short term financial solutions. The funds are secured usually via a caveat on your property and the cash advance can be provided within days of approval. You can apply for many types of loans from the traditional banks, but chances are they can not act quick enough or require documents you do not have. In these situations you can turn to caveat lenders to get the financial help you are looking for without the hassles.
What do you need to apply to caveat lenders?
You typically need two main requirements to apply to caveat lenders, the first is sufficient equity in your property, the second is a strong exit strategy to repay the caveat loan. Loan terms are generally between 1 to 6 months and at the end of it you need to have a plan to repay the fuding (ie. sale, refinance, cash flow). Caveat lenders can offer you loans up to 65% to 75% of your total property value.
Why do borrowers use caveat lenders?
They can not borrower from the banks.
The banks will be too slow.
They have bad credit.
They only need the funding for a short period.
They need funds fast.
Facts about caveat lenders
Many caveat lenders will work with you on the documentation needed because they understand that not everyone has had the best financial documents in order. They usually just want to make sure you can pay back the loan within the term. What this means is that people with a history of poor credit or those that have been turned down by banks are still able to borrow money from caveat lenders. This may come as a major relief if you are someone who thought you would never be able to get a loan.
Frequently Asked Questions about Caveat Lenders
These are common questions people have about caveat lenders.
Do caveat lenders do a check credit? Not usually, many caveat lenders do not check credit unless you intend on repaying the loan via refinance. If you are refinancing to another lender at the end of the term, the other lender is likely to approve you based on your credit history. However, just because you have bad credit doesn’t mean you won’t get approved for the loan.
Will all caveat lenders have the same approval process? No, they have their own approval processes. Some are stricter than others, and some will be slower than others.
When you are looking for caveat lending firms online, you may be confused because there are so many companies present in the market. This is a dilemma faced by many borrowers as the information is overwhelming and it becomes difficult to choose the most reliable caveat lending firms among the pool of different corporations.
How to find the most reliable one is an important question. You need to start by collecting all the information required for you understand about caveat lending firms and what they can do for you.
Caveat lending firms for business
You may be looking for a caveat lending firm to apply for a loan or to get a temporary financial solution to your cash shortage. It may be for business purposes or investment however these loans are generally utilised when the cost of waiting outweighs the cost of the loan.
Caveat lending firms generally charge more than what a local bank or credit union would charge. But what exactly are these caveat lending firms and what do they do? Basically, they are financial corporations that provide caveat loans to borrowers from their own funding sources. You deal direct with the lending firm and therefore you get a quick decision and cash normally within days or approval. They are highly experienced in this niche area of finance.
Where do you find caveat lending firms?
Online is by far the best way to find caveat lending firms and do your research. You can view their details, their prices and obtain a wide range of other information regarding their solutions. With modern technology, online caveat firms provide you with a more efficient and effective loans with less hassle and stress during the application process.
What do you need?
The two key criteria is sufficient equity in your real estate security and a good exit plan in place.
Five reasons why you should choose a reputable caveat lending firm:
They should service Australia wide.
They are extremely quick sources of funding.
Cash provided in days of approval.
Low documents required.
Bad credit considered.
Choose one that will work with you even if you have poor credit or have been turned down by banks. With a fresh approach to caveat lending, you can apply and receive your money conveniently in days.
What purposes are acceptable?
You can use the money you receive from caveat lending firms to:
Purchase another business location before you sell the one you already own.
Purchase a home before you sell the one you have on the market right now.
Start a new business with the funding.
Grow a business you already have by purchasing more stock, equipment, or hiring employees.
Get out of financial debt.
Pay for emergencies.
There are many ways to use this for of funding. The choice is yours.
Facts about Caveat Lending Firms
Each lender is different, you will have different terms and approval processes with the various lenders. Find one that works for you.
Most caveat lending offerings are for short term loans. This means you’ll have to pay it back quickly within a few months.
Some caveat lending firms will take weeks to get you the money. Others will have it to you within days. It’s usually ideal to work with caveat lending firms that will have your money ready within a few days.
What are the pros and cons of caveat lending firms?
The pros of caveat lending firms are that you can get the money you need extremely quickly.
The cons is that you may end up with a high interest rate. Some people look at this interest rate as being acceptable, especially when they consider they may not be able to get the loan or the opportunity they will for go.
So you’ve searched for the term caveat loans and need more information on what they are and where to get them from. Caveat Loans are not complicated and can be a useful tool to borrow funds secured over your property urgently.
What are Caveat Loans?
In a nutshell, Caveat loans are basically like a mortgage or charge over your property. You receive funds and the lender puts a charge over your property to secure the repayment of the debt. They can typically be behind another mortgage over your property.
Who can successfully apply for caveat loans?
The main requirement is having equity in your real estate property. The equity is the amount of value between the current debts on the property and price it would sell for. This is often called to LVR or Loan to Value Ratio. There are other requirements however equity is the key one.
Why do borrowers use caveat loans?
Simple answer, they need funds and need them fast. Whether you have an immediate cash need whether it’s for your business, investment, to pay debts or for your property. The point is that the borrower often has an urgent cash requirement and can’t afford to wait. They know exactly how long they will need the funds for (typically between 1 to 12 months) and how they will pay them back.
What is the difference between a caveat and mortgage?
A caveat can often be done quicker than a mortgage and in some instances is registered behind another mortgage lender.
Why would I use fast caveat finance?
If you don’t have time to wait, for example you need urgent business cash flow to buy stock or pay a debt or it might be for a property or investment. The cost of missing out outweighs the cost of finance.
They are fast to approve, you can usually obtain a verbal loan approval within hours and settlement can be within days. This proves to be a big help especially if you are in urgent need of money to tide you over some financial emergency.
What are short term caveat loans?
Short term caveat loans, as the name suggests, are taken for a short period of time by borrowers who need urgent funding. The funds are secured as we mentioned above over their property via a caveat. They are often used to fill a gap in funding for bridging finance, business purposes or property improvements. These short term caveat loans are available throughout Australia and can be provided within days of approval. They usually can be taken for a period of one to six months.
Let’s see who qualifies for these fast short term caveat loans
You generally need two key requirements in applying for these short term caveat loans (amongst others). The first requirement we covered above, it is sufficient equity in your real estate security and the second is a planned exit strategy. There are other requirements, however things like tax returns, good credit history and so on are not standard requirements.
Short term caveat loans – When should you apply
Borrowers apply for short term caveat loans when:
- They need fast funding.
- They can not go to the banks.
- The cost of not obtaining funding is more than the cost of the funding.
It doesn’t matter what your funding requirements, you can apply for such a loan and solve your needs without stress.
Just remember that this is not a traditional loan and they are more costly than the banks traditional funding. However, unlike the traditional banks, these loans are quick and approval is usually within a period of a day or two.
Why do you need a caveat loan?
As mentioned earlier, people can take caveat loans for many reasons ranging right from business emergencies to any investment or financial situation. They are very similar to bridging finance, a type of funding that was actually designed to help property buyers buy a new property before their existing property had not yet settled.
Who are the typical clients who take out caveat finance?
Caveat loans are usually used for real estate dealings or business dealings. If you are stuck in the short term needing funding and settlement of a pending matter will take months, caveat loans can come to the rescue in providing you with the cash required, secured over your new or existing property. Caveat loans are often borrowed by property owners, project managers, businessmen or other borrowers who realise they can not afford to miss out on funding.
Defining how much caveat loans cost.
Usually caveat loans have higher interest rates than your typical bank loans due to the extra risk the lenders have. It also doesn’t matter if you do not conform to the main banks, have a poor credit score or do not have financials. With caveat loans, the main concern is equity in your real estate and a good repayment plan to repay the funding.
The idea behind this type of loan is that you are receiving the caveat loan as a temporary financial aid. Therefore you must have an exit plan in place, to know how you will be going to repay the money back in the short period of time.
Are caveat loans Australia wide?
The answer is yes. The land title system differs from state to state however they all have caveats. You can get caveat finance in all states and cities including:
- Queensland (QLD).
- New South Wales (NSW).
- Victoria (VIC).
- Australian Capital Territory (ACT).
- Northern Territory (NT).
- Western Australia (WA).
- South Australia (SA).
The following are the most common reasons:
- Banks are too slow;
- Banks have said no;
- Funding is required only for a short period.
- Low doc requirements
- Bad credit considered.
A commercial business loan can sound complex or confusing however in reality it is just a business loan used for business or commercial purposes. You may be searching around for more information on a commercial business loan, what rates and fees apply and what lenders provide this type of finance. Well below will explain the inns and outs or the pros and cons of applying for a commercial business loan with a financier.
What is a commercial business loan?
As we mentioned, they are not complex financial arrangements. A commercial business loan is secured funding provided to a business for any commercial or investment purpose. It may be for a commercial premises or it may be just cash-flow for the business operations. There are many advantages this type of arrangement can provide and businesses or start ups can utilise this funding option.
Why us a financier for a commercial business loan?
Banks look for financials, cash projections, trading history, good credit and require strong security. If you do not fit their box, they simply decline your loan or will not look at your application in the first place. If you are approved, the process can takes weeks for funds to actually hit your account. It is a real headache.
Non banks are far more flexible when it comes to a commercial loan. They rarely require financials. They can also provide funding in days of approval and loan terms are usually shorter (1 to 24 months).
What do you need to apply for a commercial business loan?
You do need a few things firstly, to apply to banks or non banks. You need to have sufficient real estate security. This can be residential or commercial property however the equity needs to be at a suitable LVR to the lender (usually 65% to 70%). You also need a good exit strategy, as we mentioned these loans are a shorter term finance solutions so you need to be able to explain how you will repay the commercial property loan at the end of the term.
How to Choose the Best Commercial Loan Broker
When you’re ready to get a commercial loan, you need a broker who is going to help you make the process easy and not cause headaches (or you can find a lender direct yourself). That’s why it’s important to choose the best commercial loan broker possible. In order to do this, you need to understand what to look for in a broker.
What is a commercial loan broker?
A commercial loan broker asks you questions about your finances and then pairs your needs with loan terms that meet your qualifications. For example, if you have bad credit, your commercial loan broker should be able to find a lender that will be able to help you with a commercial loan despite your credit history.
How do you know a commercial loan broker is a good one?
You know a commercial loan broker is a good one when he is interested in helping you and presents himself confidently and evidences that he knows the products available from different lenders on the market. If they do not return phone calls or emails and are slack at getting back to you forget them and move on. A commercial loan broker should ask you key questions in your initial communication to get an idea on what he or she can assist with.
Where do you find a commercial loan broker?
The best place to start is online. You find find a good commercial loan broker or even better you can find a commercial loan lender and deal direct with the decision maker.
Reasons to use a commercial loan broker:
You want to buy commercial property.
You want funding for commercial purposes.
You want someone to help you with the process of getting a commercial loan.
A commercial loan broker understands how to best help you.
A commercial loan broker is ready to help you.
What can you use a commercial business loan for?
You can use a commercial business loan for many reasons.
Purchase more stock because your products are in demand.
Purchase more equipment to take on more business.
Buy a new location, so you can grow your business quickly.
Pay for debts, so you don’t end up with bad credit.
Hire new employees to keep up with demand.
There are many other reasons you can use a commercial business loan for, so don’t let these reasons stop you from applying.
You have landed on this page for a reason. You’re either looking for commercial finance or wanting to know what it is. Let’s get started.
What is commercial finance?
It’s basically a loan used for commercial or business uses. These uses can be, for example, buying a commercial property or for your existing business cash flow. The best way of looking at it is finance used for any reason other than personal or consumer purposes. Commercial finance can be obtained from bank or non-bank lenders depending on your circumstances and needs. This page specifically is about commercial finance from non-bank lenders for short term purposes.
Why use non-bank lenders for commercial finance?
There are common reasons for borrowers seeking this type of commercial finance. Usually it is a speed factor, meaning they cannot wait weeks for the banks to approve or decline a loan and they need the funding in days. Another reason is that they usually only need the loan for a short term period. These non-bank lenders will usually only lend on a short term basis (1 to 24 months). Other reasons also include not having financials/tax returns required by the banks or perhaps the borrower has bad credit. Non bank lenders will usually look beyond this when assessing your application for commercial finance.
Who qualifies for commercial finance?
Amongst other things, there are a few main qualifying factors, including:
The use of funds needs to be commercial in nature.
There needs to be real estate available as security for the commercial finance. It can be any type of property (residential, commercial, industrial, rural) but their needs to be sufficient equity (lenders usually lend to 65% to 75%).
You need to have an exit plan to repay the commercial finance. As mentioned before they are not long term finance solutions. Your exit plan may be sale of a property, sale of a business, refinance down the track or some other suitable strategy.
Why do borrowers take advantage of commercial loans from non-bank lenders?
As we briefly touched on, borrowers use commercial loans for business or investment purposes. But why do borrowers not get this funding from the banks? The main reason is speed. The banks might take a month to assess the application and by that time it’s too late. Alternate lending companies can approve and settle loans within days of approval. You usually pay a higher rate but the loans are for shorter terms, one to twenty four months typically. Other reasons may include bad credit or lack of financials to go to the big 4.
Recap, 4 common tips when to use commercial loans:
Speed and efficiency – money in days or approval.
Short term need for funding.
Bad credit is considered.
When you need fast funding;
When you need a short term fix;
When you have an exit plan; or
When you have equity in a property for security.
Most small to medium sized business owners think it will be a great challenge to obtain bank funding with the current banking situation not to mention apply for a commercial loan. Sadly, funding for this market is crucial and obtaining a commercial loan for start up or an established businesses is important.
Commercial Loan Rates
You need to consider a whole range of things including the commercial loan rate offered by different type of lenders and whether you qualify for one loan or another. Understanding your commercial loan rate and more below.
What is a commercial loan rate?
A commercial loan rate is an interest rates that a company charges on a commercial loan. You are responsible for paying the interest rates, and they are based on the amount you borrow. It’s usually a percentage of the total loan and can also include the setup fees and charges. The first thing you will notice is that a commercial loan rate is higher than the average personal loan rate.
A commercial loan can be used for any business purpose or to purchase or upgrade commercial property or real estate. Interest is often fixed for the term of the loan.
Why is a commercial loan rate higher than personal loans?
A commercial loan rate is higher than personal loans due to risk involved. Commercial loans are basically a pledge to a business on the basis the business is going to do well and be able to repay the loan. Or it is based on a commercial property remaining occupied and not vacant. For this reason, a commercial loan rate offered by a lender is often higher than personal loans.
What else influences a commercial loan rate?
The length of the loan also influences the loan rates. A short term loan will almost always have a higher loan rate rather than a long term loan. Having a strong repayment plan may influence the commercial loan rate as well.
Credit history can also often affect rates. Some companies do not accept borrowers with bad credit. Other companies may not even bother with a credit check however in return will charge a higher commercial loan rate.
You may have come to the realisation that commercial property mortgage loan isn’t as straight forward as you thought. Bank Lenders and brokers often put it in the too hard basket or can’t give you a straight answer. In reality it is actually quote simple and straight forward, you just need to speak to the right people. This page is about fast,commercial property mortgage loans.
So what is a commercial property mortgage?
It’s basically a loan secured over commercial real estate (i.e. office premises, retail shop or industrial premises etc.). The loan is secured by a mortgage or in some cases a caveat. Borrowers often use the funds for their business, for the property or for other investment reasons.
When to apply for commercial property finance?
Usually when you need the funds quickly! This style of funding is not a long term finance solution. The average term is between 1 month and 24 months and given the short term mature is generally more expensive than your normal bank funding.
Who can apply for this type of commercial mortgage?
You generally need to have two main requirements. The first is obvious; you need commercial property to use as security. It must have enough equity in it to secure a loan to the lenders Loan to value ratio (LVR) requirement. This is normally 65% to 75% of the value.
The second key requirement is you need an exit strategy as to how you intend on repaying the commercial property finance. Will you sell the property? Will you refinance? Will you receive a lump sum payment in the future? These are examples of common exit strategies.
Where can you get this funding?
Non-bank lenders. They are flexible, can often tailor the loans to your needs and do not usually need financials/tax returns and can look beyond bad credit.
Overview, 3 reasons why to get commercial property finance from private lenders:
Its short to medium term.
Its hassle free.
Commercial Property Loans can be confusing if you are applying to the banks. The rates vary, the fees are different, you do not know what the criteria is required to apply and so on. Non bank lenders are by far the best way to obtain commercial property loans and below will describe in detail this form of finance.
Why use alternate funding for commercial property loans?
Non bank lenders are extremely flexible and can often tailor loans to suit your needs. With the banks, if you do not fit their criteria and have the required paperwork they will just decline your application. With non banks, the loans can be structured around your needs and you deal direct with the decision maker. Things like financials, bad credit, no trading history and so on can often be over looked by non banks.
Tips for Choosing a Commercial Property Mortgage Loan
A commercial property mortgage loan can be used to buy properties or to borrow for another business purpose. Not all commercial property loan solutions are the same, it’s wise to look around for the best loan for your needs. Banks provide a cheaper commercial property loan solution however are not very flexible, whereas non banks are quite flexible however are more expensive.
Determine Your Business Objectives
Even though there has been an increase in commercial property transactions in Australia recently, be aware that every business has different needs when it comes to financing a commercial property. It’s important to have business goals and consider your finances before you apply. What can you afford? How long do you need the commercial property for? Is it long term or short term? When you have your goals and finances in mind, you’ll be able to find the right commercial property loan best suited to your needs.
Consider Different Types of Commercial Loan solutions
Loans are available with fixed rates, variable rates, short or long term. Interest rates vary, and finding the lowest rates may not be the only thing you need to consider. A short term commercial property loan from a non bank lender may suit your needs perfectly. They are between 1 to 24 months, provide the funding you need and usually you have an exit strategy in mind. These types of non bank lenders are extremely quick and can customise loans to your needs. Lack of financials, trading history or poor credit are often overlooked.
Choose the Right Loan Terms
A bank commercial loan usually has a term up to 15-years, with a five-year minimum. Paying off the loan early may incur a penalty, so always ask about early pay off when considering a lender.
A non bank commercial property loan has a term up to 12 months, often with a short minimum term.
What are commercial property loan rates?
Commercial property loan rates is the interest you have to pay on top of the principal loan amount you borrowed from the lender. It’s a percentage of your total borrowed amount. Most commercial property loans are interest only loans, meaning you repay the principal at the end of the term.
Why is it important to know about commercial property loan rates?
Different lenders have different commercial property loans rates. A big bank is often far cheaper than a non bank or private lender. However, in saying that, big banks have stricter criteria, are far less flexible and often take too long.
It’s important to know what commercial property loan rates different lenders charge and which ones you will qualify for. I.e. Once you know how much you’ll have to pay on top of the borrowed amount, you can work out whether the loan is a viable option for you. For example, a short term loan from a non bank lender is usually 1 to 12 months.
Getting the Best Commercial Loan Rates
When it’s time to take your business to the next level or start a new business, it may be time to consider a business loan. It’s important to take a little time to consider the many options that are available. There are plenty of Australian lenders around, both non bank and bank, but not all of them will provide you with a deal suited to your needs – or even the same commercial loan rates.
Determine How Much Money Is Needed
Many lenders will provide loans for a limited amount, often up to $1 million or higher amounts considered on application. Only the larger lenders will make loans available for more than this, and their terms will vary considerably. The amount of the loan and your purpose will also determine the length of the repayment period.
Consider the Benefits of Fixed Rate vs. Variable Rate Loans
Consider the commercial loan rates lenders offer. Like a mortgage, these rates are available in either fixed rate or adjustable rate loans. Fixed rates provide consistency and comfort where as variable rates provide flexibility.
Interest Rates Vary Considerably
Each lender will set their own interest rates on their commercial loans. This means you shouldn’t assume interest rates will be the same. The truth is that they can vary considerably depending on the lender, how long you need the funds for, your purpose and your Loan to Value Ratio. For example a bank lender might provide a loan at 8% per annum with a 10 year term however they will likely have break penalties for paying early if you choose too. Whereas a non bank lender may charge 10% for a 6 to 12 month term however will not have a large early repayment penalty. You need a lender suited to your objectives. If you intend on refinancing or selling the property in 12 months than a non bank could be suited to you.
Commercial Mortgage Loan for Property
A Commercial property loan can sound confusing, however it does not need to be. Many people turn to a commercial mortgage loan and turn out frustrated given the lack of information and assistance.
Improving Your Chances of Getting Commercial mortgage Loans Australia
Not everyone is easily approved for Commercial mortgage Loans Australia. You can improve your chances for this type of loan simply by providing all of the information the loan officer requests and be upfront about your situation
Short term financing isn’t only available for small business owners. Corporate finance options are available for all type of people and businesses big or small.
Why do people need corporate finance?
People turn to corporate finance options when they find themselves with a pending finance need, anything from business expansion to refinancing large amounts of debt. Running a large company can get overwhelming and the costs can sometimes spiral. To relieve the stress on cash-flow, people turn to corporate finance. Below discusses corporate finance options from outside the banks.
What is corporate finance?
It is a type of debt that is used for business or investment purposes. It can be for anything ranging from starting a new project, raising capital, expansion, refinancing, property acquisition, the list is endless. It is usually secured via real estate or other assets the company or directors own and is often for the short to medium term (1 to 24 months). It mainly encompasses everything but consumer or personal finance provided to households or individuals.
What do you need to apply for corporate finance options?
With corporate finance, you’ll need equity in the property provided as security. Loan amounts range from 65% to 75% of property value. You also need a strong exit plan to ensure repayment is made within the term. These are the key requirements for this form or style of funding however different lenders have various other criteria.
Where can you apply for corporate finance?
You don’t have to go anywhere, these days research and information can all be provided or obtained online. You don’t have to leave your office. You can enquire for corporate finance online on lender’s websites. Simply complete the application, and you’ll usually have an answer yes or no within hours. If you’re approved, you’ll receive the funds within days of signing the documents.
Five reasons to apply for corporate finance:
You need urgent capital.
You want to grow your business, but need extra cash to do it.
You do not have time for traditional banks.
You have a strong exit plan.
You want to work with corporate finance specialists who understand your financial needs.
Frequently Asked Questions About Corporate Finance
What types of companies offer corporate finance?
Short term lenders – these lenders offer quick corporate finance. They normally only offer loans that you repay within a few months to a year. Many people decide to seek this type of loan when they want to buy something, but don’t have the money at that time. They expect to have the money available soon after making the purchase.
Long term lenders – these lenders offer long term cash solutions or large loans paid back slowly. You repay these loans over a long period of time.
Banks – banks offer corporate financing to people and businesses with good credit. They tend to have very strict rules and regulations.
Private lenders – private lenders are usually friends, family or other private people who loan money on an individual basis.
What are the steps to applying for corporate finance?
Decide what you need corporate lending for, what it will cost, and how much you will need.
Find a loan that suits your needs. Many lenders offer a variety of loans and can help.
Decide on a loan company and research them. Loan companies usually have reviews and reputations with regulatory agencies. 2.
Decide on a loan and apply. Loan officers help with this process. They will tell you their requirements for the loan that you are applying for.
Who can apply for corporate finance?
Anyone who owns or operates a corporation can apply for corporate finance. You just have to have a need for funding.
What is the main advantage of corporate finance?
The main advantage of corporate finance is it gives corporations options for funding. It allows them to expand, purchase, and renovate.
Are you searching for a way to improve your debt or clear it for good? Are you tired of bill collectors calling and harassing you? Debt consolidation could be your way out of this seemingly never-ending cycle. There are a few things you should consider when examining debt consolidation options. Debt consolidation may seem like a simple solution at first, but it is important to understand what debt consolidation is before deciding which option is right for you.
What is debt consolidation?
Debt consolidation is the practice of taking out a loan to pay off multiple high interest loans. Forgetting to make a payment is easy when you are dealing with several creditors at once. With debt consolidation, you only have to make one monthly payment rather than worrying about a variety of them. Paying off high interest loans and only having one payment are just two of the reasons people or businesses seek debt consolidation, here are some more:
It’s easier to budget.
Can save money.
Makes debt management easier.
Who uses debt consolidation?
Anyone who owes money to more than one creditor is the ideal applicant to use a debt consolidation company. Another type of debt consolidation customer is someone who would like to lower his or her interest rate or simply wants to extend the life of a loan. People or business owners who use debt consolidation often have equity in their home and have already come up with a way to repay their debt. They simply need a little help.
When should you use debt consolidation?
If you’re having a difficult time paying your debts on time or you’ve been rejected by the large lending institutions for a loan, it’s time for a better debt consolidation option. Bad credit doesn’t always have to be a problem for you when looking for a loan to consolidate. Some private or non bank lenders help people consolidate their debt even if they have been rejected by other lenders and have bad credit or no financials.
Where do you find debt consolidation options?
No doc loans are perfect for you if you are looking for a way to borrow money without submitting a lot of documentation. Many people decide to pursue low doc loans because they don’t have the time, energy, or means to furnish all the paperwork traditional lending institutions require.
What are no doc loans?
The term no doc loans is actually a inaccuracy. Almost all loans require some documentation. In this case, the loan requires minimal documentation. These no doc loans usually only require the most basic of verification and ability to repay.
What are the differences between no doc loans and traditional loans?
They do not require the amount of paperwork that traditional loans do.
They are more flexible than traditional loans.
Bad credit is considered.
Being self employed is okay with no doc loans.
They have a higher interest rate than traditional loans.
They work better for people who do not want to provide a lot of financial information.
What are some misconceptions about debt consolidation loans?
Many people believe that debt consolidation loans are the answer to all of their credit problems. Unfortunately, this is not always true. It’s important if you use debt consolidation loans, you make a plan to pay them back. Many lenders will require equity in a property and will approve a debt consolidation loan to you up to 65% to 75% of the property’s value. They also require that you have an exit plan, so you have an idea of what you’re going to do to pay off the loan according to its terms.
There are also disreputable consolidation companies, which is why it is extremely important to check the company’s reputation before signing anything. Most reputable companies have easy to understand policies and procedures, and are happy to answer any questions that you might have.
Development funding and construction loans are finance products that assist builders and developers during a project. We all know just how stressful and time strenuous property projects and builds can be so hopefully this page will ease the hassles and assist you in finding development funding.
What is development funding?
Basically, development funding is a finance product whereby the lender provides funds for the purpose of a development project. The funds are secured by either the development property itself or other real estate security. There are two main types of development funding; the first is senior debt funding which is the main line of funding usually from the banks which funds the development to completion. The second is the funding required at the beginning usually to acquire the site or provide capital for upfront costs to get it ready for the senior funder (very similar to a bridging loan). This article is mainly about the second type mentioned above.
Who can apply for development funding?
Anyone can apply who has a project on the go. The key requirements are to have enough equity in the security property being provided and an exit plan. The amount of equity will depend on the project but typical LVR’s are up to 65% to 70% on the real estate security provided. The real estate security can be the development itself or it can be the developers other property. The exit plan is usually sale or take out funding by the senior incoming lender.
Why get bridging development funding?
Most of the time developers can’t go straight to the banks. They may not have enough pre-sales, they may not have a history in development, they may not have all the paperwork, they may not have time to wait for the banks or they may have bad credit. The reasons are endless.
Where to get bridging style development funding?
Non-bank lenders or Private lenders. These lenders are fast and don’t muck about and will take you seriously. You usually deal with the decision maker, the terms of the loan are flexible and money can be provided extremely quickly.
When to apply for development funding:
To bridge a gap and get your project to shovel ready.
When you need a quick source of funds (usually in days).
When you need funding for only a short period.
Borrow the money you need with an equity access loan. This type of loan is one that many people decide to get because they like the freedom of using equity they’ve built up in their property. Do you think an equity access loan is right for you? Find out what it is and how it can help you get the money you need here.
What is an equity access loan?
Usually, equity would continues to build as you pay off your mortgage and the value of your home increases. The “equity” sits there and doesn’t get used and when you sell your house, you receive a lump sum amount. Instead of waiting for the sale of your home or real estate, you could use that value now via an equity access loan which allows you to get funding in the interim.
What terms are used in an equity access loan?
Most lenders require a certain amount of equity in your home to borrow money. For example, you may only be able to borrow up to 65% to 75% of your property’s value. The exact amount you can borrow depends on how much equity you have accumulated.
How do equity access loans work?
Equity access loans work like a line of credit. The amount of equity you have in your property is the maximum that you can borrow at one time or your credit limit. When you make a purchase using an equity access loan it subtracts the amount from your equity. When you make a payment, it decreases the balance. Alternately, you can borrow a lump sum and repay a lump sum with interest only terms.
Frequently Asked Questions About Equity Access Loan
Who can use an equity access loan?
Anyone with a financial need and equity in property can use an equity access loan. Business, individuals, and corporations are all eligible for these loans. This means if you own a home, a business, or an investment you can use an equity access loan. Just like ordinary home loans, you do also have to have the ability to repay.
What are the requirements of an equity access loan?
Just like other loans, equity access loans have requirements. These requirements vary depending on the lender, type of loan, and type of equity you have to secure the loan. Some common requirements are:
equity in property,
an exit plan or plan to repay,
financial and property records, and
the need for a loan.
How do you calculate equity for an equity access loan?
There is a simple process to calculate equity for an equity access loan. This process can also be completed by using an equity calculator.
First, you find the real and current value of your home or property. You do this by using an appraisal or if you do not have a current appraisal, you can use the tax-appraised value. Using the tax-appraised value is not nearly as accurate as using a current appraisal.
Then you find the amount that you owe. You can find this by adding all of the money you owe in mortgages, liens, or other money owed on the property.
Finally, you subtract what is owed from the real value of your property.
Equity is often calculated using the purchase price or current value of the property. It is important to be careful when doing this because the value of property can fluctuate over time.
So you have equity in your property and you’re looking for some finance. We are here to explain what equity finance is, how to get it and where to start.
What is equity finance?
As briefly mentioned above, it is a form of finance for borrowers with equity in their property. The finance is usually secured by a first mortgage, second mortgage or caveat and the lenders providing the finance look more towards the security property as opposed to the character of the borrower.
The funds can be utilised for plenty of different reasons from paying creditors, invoices, cash flow and the list goes on.
Why do borrowers apply for equity finance?
Equity finance is fast and flexible. Because this type of finance is mainly provided by non-bank lenders, it can be provided within days of approval and the lender making the decision can often customise the loan to your needs. This eliminates the need of going to the banks, jumping over their hurdles and waiting weeks to actually get the funds.
Who can qualify for equity finance?
Amongst other things, lenders look at two key requirements:
You must have sufficient equity in your real estate property you are providing as security. “Equity” is basically the value of the property less any borrowings against it.
You must have a payout plan. This is the way you intend on repaying or exiting the loan. Equity finance is not a long term debt solution, loan terms are mainly between 1 to 24 months. Common exit strategies include sale of the property, refinance or by other means.
Three main reasons when it’s the right time to apply for equity finance:
You don’t have time for the banks (you need funding fast).
You only need the money for a short to medium period of time (not long term).
The banks won’t look at you because of your lack of financials or you have bad credit.
Are equity loans for any purpose?
Yes all purposes. If you’d like to pull cash out of your home for business or improvements, then a home equity loan might just be the best way to do it.
Why use equity loans?
As we touched on, equity loans are obtained from private funders who can often look past the criteria traditional banks would look at. The key requirement is equity in the property you put up as security.
These are the key reasons why one would utilise equity loans:
They are fast. Approval and settlement can be within days.
They are for short term periods (1 to 24 months).
Bad credit or lack of financials is considered.
How does a home equity loan work?
It provides an opportunity to secure a mortgage loan against the current value of your home, which can put extra money into your business or bank account. For example, you would like extra funds to make some improvements on the property, invest in the market, cash flow, business expansion, start up capital and so on.
To understand equity loans Australia, you first have to understand what it means to have equity. When you purchase property, you take out an initial mortgage or loan. As you pay off that mortgage or the property price value increases, you develop equity in your home. The value of the property minus the amount of the mortgage equals the equity in your home.
So, we have established the equity is the difference between the property value and the amount owed on the property. An equity loan Australia is a loan against the amount of equity you have.
Where do you find a home equity loan?
Once you find a lender who provides this style of funding, start by answering a few questions and seeing if they initially can assist. The Internet is a good way to find and compare the home equity loan choices that are available.
Five reasons to get a home equity loan:
You want to turn home equity into cash.
You want to put cash into your business.
You need cash quickly.
The market value of your home has risen, so you have equity in your home to improve the property further.
Repayment options are flexible to make it affordable for you.
How is an equity loan paid off?
You can pay off an equity loan in a number of ways, here are a few:
Making normal monthly payments.
Selling the property and paying it off all at once.
Paying the loan off in a lump sum with revenue or income.
Selling another piece of property.
If you default on an equity loan, the real estate can be sold to repay the loan.
What are the advantages of an equity loan?
One of the advantages of an equity loan is that the equity is just sitting there un utilised. This type of loan allows you to use the equity to make improvements, expand a business, or make a large purchase. An equity loan can be for many purposes, they may have higher interest rates, however it may prove worth it when you can get the cash you need.
They allow you to access the equity in your home or business property.
They can be extremely fast.
They are a good source of funding for purchases.
They can help obtain a loan if you have bad credit.
They can be easier to get if you use private lenders.
You can get an equity loan even if your credit is bad or a bank has turned you down.
Who offers equity loans Australia?
Many lenders offer equity loans Australia, but not all of them will have an easy, online application or lenient approval guidelines. People who have been turned down by banks, have bad credit, or no credit at all usually turn to alternate lenders who can often provide funding in days of formal approval.
What is a home equity loan bad credit?
A home equity loan bad credit is basically a mortgage for people with bad credit. The lender uses the value of your property after you subtract all of the loans to secure the finance.
There are some terms that you need to know when learning about these loans.
Home equity – The amount of value your home has, after all of the loans are added together and subtracted from the full value.
Collateral – Collateral is property used to secure the loan.
Real value – Real value is the current value of the property if it were sold that day.
Interest – Interest is a percentage of the loan the lender charges for borrowing the money.
Home equity loan – This is money a company gives you that you repay using your home equity as collateral.
How do you calculate equity for an equity finance mortgage?
Equity as we said is the value of a property after you deduct all the liens you have against it. For example, if you have a mortgage for a few years, the house may have gone up in value due to the market or you might have paid off your mortgage. If you take the value of the house and subtract the amount you still owe on it, that’s the equity you have on the house. That equity usually just sits there until you sell the real estate. You can utilise it as you can seek an equity finance mortgage.
Get the Money You Need with an Equity Home Loan
An Australian equity home loan can give you the cash you need to do many things, whether expand your business, start a business, improve the property, buy a further property and the list goes on.
Borrowers often try the banks only to be told it will take weeks (sometimes even months for settlement) to be approved for a what they call a fast business loan, but really it is excruciatingly slow. The way to obtain a fast business loan, usually within days of approval, is from a private or non bank lender. Below will provide details on this style of fast business loan and how to successfully apply.
What is a fast business loan?
A fast business loan is a type of loan which you apply for via non bank lenders for any emergency funding for your business or investment purpose. The funds can on most occasions be in your account in days of approval. Whatever the reason maybe, a fast business loan will help your business full-fill its needs and move to the next stage in the business life-cycle. A fast business loan can be used for anything from start up capital, expanding, new premises, cash-flow, stock purchase, bridging finance and so on.
What do you need to apply for a fast business loan?
As we mentioned, these loans are from private or non bank finance companies and are extremely flexible or customised. However, you do need to satisfy some initial criteria before applying. For a secured fast business loan you need to have sufficient real estate security to provide as collateral for the loan. However unsecured options are available based on your cash-flow. Also, as these loans are for a shorter period, you need to have an exit strategy to pay back the funds at the end of the term. The most common types of exit plans are sale of the security property, refinancing the fast business loan or via an expected lump sum payment.
What are some of the pros and cons of fast business loans?
There are a few pros and cons you should be aware of with a fast business loan. The pros of a fast business loan is that you get the cash you need to start, save, or grow your business in a matter of days. You can use it in any way that you choose as well.
The cons is that they come with some fees that will make the loan expensive when you’re paying it back. This is okay if you have the monthly cash flow or a lump sum coming in the short to medium term.
How do you improve your chances of getting a fast business loan?
Since you are looking for a fast business loan, you are likely wanting to know how you can get approved as quickly as possible. One thing you must be sure to do is be honest. When you’re honest, you save a lot of time when the lenders check your information. If anything is inaccurate, they will have to check it, and you’ll have to provide more information.
It’s also important to get your finances in order, so you can tell the lender how you will be able to pay the loan off. They want to know this so they can be feel confident about lending you borrow money. This is called the exit plan. Sometimes, you’ll have to put up collateral, so that’s something you should think about ahead of time.
Using lending institutions besides a traditional bank will also improve your chances of getting a fast business loan. Traditional banks often have stricter requirements, so their approval rates are lower.
hen shopping for a loan, it is important to use all of the tools available to you. One important tool is a finance calculator. Before applying for a loan, familiarize yourself with the different types of finance calculators.
Which finance calculator should you use for loans?
Use the right finance calculator when searching for a loan. The most common ones are:
Loan to value (LVR) calculator– This type calculates your loan amount and what you can borrow based on the security you provide.
Loan interest calculator – This will take the amount of the loan and calculate your monthly interest payments.
Interest Rate calculator – This takes your requested term of the loan and calculates an indicate interest rate you might be up for on applying.
When this process is complete, you will know how much of a loan you can afford. After that, it is a matter of filling out the online application. You could receive an approval in as little as 2 hours.
For more information, visit our FAQ page or give us a call. Our qualified loan officers are happy to help with any of our finance calculators.
When you’re searching for finance companies, it’s important to know what you should look for in finding the right one. What are finance companies? Finance companies provide loans to people who need funds for any purpose including business and investment. Each finance company has their own procedures, so it’s important to look for one that can help you with your individual needs.
Who do finance companies service?
People who need funding often start their search for finance companies and information on different providers. There a plenty of different companies out there, you need on who can service you needs. You want to buy a home, start a business, grow a business, pay off debts, etc.
There are so many finance solutions out there, secured, unsecured, interest and principal, interest only, long term debt, short term debt and the list goes on.
What do borrowers want from finance companies?
Borrowers want finance specialists who can understand their financial needs, and provide them with the loans with the best rates and terms. They also want their money quickly and easily. Many prefer to communicate with their lenders online, via email or phone.
How do people find a good finance company?
They can find good finance companies by doing their research. When most people research a finance company, they need to conclude that they feel comfortable and at ease. When you need financing, you need a finance company that cares about you and your financial future.
How do you work with a finance company?
It’s a good idea to be honest with a finance company. You’ll need to provide information about you, your business, your income and assets and a few other details. It’s also important to let the finance company know the real reason you want a loan. This will help the lender work out the best loan that is suited to your needs.
When should you start to work with a finance company?
You should start to work with a finance company when you’re anticipating you will need a loan. Don’t wait until the last minute. If you suspect you’ll need cash in the near future, research, choose and contact a finance company of your choice. This way you’ll put yourself in the best position to be approved and have the loan processed in plenty of time.
Where can you find a good finance company?
Online is by far the best place to start. You can obtain information, see prices and criteria and so forth. The steps involved usually include making the initial enquiry to see if you will qualify, completed an application, signing documents on approval and getting the funds.
What documents do I need to apply to finance companies?
Each type of financing has different requirements. Some require exact documentation, collateral, or security, and some require none of these things. You will learn exactly what a lender requires when you choose the type of loan that is best for you. Most loans have individual requirements to qualify for them. Ask your lender what exactly they require for the type of loan you are seeking.
Do I have to provide a lot of documentation to finance companies?
No, not all finance companies require extensive documentation. Some lenders offer no or low doc loans. These are loans that do not have the usual documentation requirements. If you need a low or no doc loan choose a lender that offers them.
Do finance companies refinance existing loans?
Some finance companies will finance existing loans. This is known as a refinance or refinancing. You can refinance with your original lender or with a new lender. Some lenders specialise in refinancing loans.
What types of finance companies are there?
Short term lenders – finance companies that provide loans that you pay back in 1 to 24 months. You use these for quick cash and they often require collateral.
Long term lenders – finance companies that provide loans that you pay back in 5 to 30 years. You use long term lenders for any loan you wish to pay off slowly. Many long term lenders specialize in mortgages for the purchase of a home or property.
Banks – banks are financial institutions that also act as lenders. They offer a variety of loans but have strict policies regarding documentation and lending terms.
Non bank lenders – non bank lenders are flexible and innovative finance companies
An equity calculator can help you determine if you’re going to be able to borrow enough money for your needs. While an equity calculator can only provide an estimate, it’s usually close enough for you to know if an equity loan is something you should pursue.
What is an equity calculator?
An equity calculator is a tool that calculates how much equity is in your property. You input the necessary information and it supplies the value of your home, business, or other property.
How do you use an equity calculator?
For the most part, equity calculators are easy to use. You can learn how to use one in just a few short steps.
- Find the equity calculator that is right for you. If you are calculating equity for a business, you will use a business equity calculator. If you are calculating equity for a home, you will use a home equity calculator.
- Enter the total value of your home from a recent appraisal.
- Enter the amount of your mortgage. If you have a second mortgage some equity calculators will have a space for a second and third mortgage. If the calculator you are using doesn’t have one, add all of the mortgages or loans together.
- Hit the button for calculate – it may have a different name depending on the calculator.
- The number it returns is the approximate amount of equity you have.
Who uses home equity calculators?
Anyone can use a home equity calculator but most of the time they are used by lenders and people who are considering getting an equity home loan. Lenders use them to figure out how much they can safely lend you.
Besides figuring out how much equity you have, you should use a home equity calculator to figure out how much of a loan you can get based on the calculated amount. Many lenders will only give you up to 65% to 75% of your property’s value. The more equity you have, the more money you may be able to borrow (pending the lenders further requirements).
What are some terms used in a home equity loan?
As with anything, home equity loans use specific terms.
- Current market value – the value of your home right now.
- Home equity – the real value of your home after subtracting anything owed on it. It is used as security on your loan.
- Security – this is what you are offering to guarantee the loan. In the case of a home equity loan it is the equity in your home.
- Lien – a lien is a monetary amount that is owed to a specific person or company when you sell or refinance your home.
- Interest – this is the amount that the finance company charges you for loaning you money.
Home ownership is a dream for many across Australia. Searching around and comparing the right home loans can be difficult. Before buying a home, you should be familiar with the terms used and products.
What are home loans?
People use home loans to purchase, build, or refinance a home. A home loan is not for businesses or commercial investments. A lender gives a person money to purchase a home loan in exchange for interest. The interest is a percentage of the total loan amount. As a person pays back the loan, they also pay the interest usually as a regular monthly payment. Interest rates vary depending on credit rating, income, the prime interest rate, and the individual lender’s requirements.
Finding the right Home Loan Lender
Many lenders offer home loans in Australia. As with anything, there are many benefits and some drawbacks with each type of lender.
Banks are the most common type of lender and offer many loan product s. Usually bank home loans require good credit, a verifiable source of income and a good relationship with the bank. Although banks seem like the perfect solution for a home loan, their strict requirements prohibit many from obtaining a loan.
Non bank lending corporations are similar to banks in that they offer several types of loans. Unlike banks, lending corporations can be more flexible in their requirements and often offer loans to people with different circumstances.
These lenders are private companies who offer money to those who wish to purchase a home. Private lenders are usually more expensive however have far less criteria.
Although they are not lenders, they are a common part of the process. A mortgage broker works with a variety of lenders to find the best one for a borrower. Since mortgage broker work with a large amount of lenders, they are capable of finding better rates. The benefit is the mortgage brokers fees are normally paid by the lender. This fee is sometimes a percentage of the loan and sometimes a flat rate.
Types of home loans
There are many types of home loans or mortgages available on the market. You will need to choose the one that is right for you and your circumstances. Here are some examples:
Fixed Rate Home Loans
A fixed rate home loan is a mortgage where the interest rate stays the same for the life of the loan. These home loans are very common and are considered to offer the most certainty to home owners.
Variable or Adjustable Rate Home Loans
An variable rate home loan has an interest rate that varies with the prime interest rate. This causes your payment to fluctuate with it. These are for borrowers who do not like to be locked in to a fixed rate.
Interest Only Home Loans
In this type of home loan, the borrower pays only the interest for a predetermined period of time. After that period, you then are liable for the balance of the loan or the principal. It is then necessary to either pay it off or refinance. This type of home loan offers lower monthly payments to start.
Reverse Home Loans
reverse home loans or reverse mortgages are a special type of home loan for the ageing or retired population. Reverse mortgages are targeted at seniors who wish to stay in their family homes whilst also access equity in their property. This loan is not paid back until the home is sold or the resident has gone.
Low or No Document Home Loans
These loans simply require less documentation than traditional home loans. They are useful for people who are self-employed, have nontraditional employment or have a non-conventional way to verify their income. Lenders offer these loans at a higher interest rate due to the risk associated with them.
Bridge home loans
A bridge home loan or bridging home loan is a loan that is designed to be refinanced or repaid shortly after its origination. It bridges the gap between the initial purchase of the home and obtaining a more permanent loan solution or selling a property. Bridging loans are short-term loans with a length usually of only a few months to a year.
Construction home loans
These loans are for building a new home. A construction home loan can also include land. Many builders work with lending institutions to provide this type of loan. These loans can be short-term or long-term loans depending on the lender, builder, and loan options. It is important to ask about lending options before signing a construction contract.
There are many more loan types out there that are variations of these. Each loan type has its pros and cons. You should carefully consider each loan time to find which type is right for you and your home loan needs.
Terms used in the home loan process
Mortgage – another term used for a home loan.
Rate or interest rate – this is the annual interest percentage rate of the loan (interest is usually paid to the lender monthly). It is what the lender charges for the loan.
Principal – this is the original amount you owe on the home loan without the interest added in.
Payment – the principal plus interest that you pay every month or so.
Down payment or deposit – the amount that you pay upfront to contribute to the property purchase. This usually goes directly to reduce the principal you borrow.
Equity – this is the value of your home minus what you owe on it.
How to Get a Home Loan to Buy a House
Each type of home loan has different requirements but there are some common requirements that most people need. These requirements are relatively easy to obtain:
You will need a contract (subject to finance) on the property that you wish to purchase.
You need to gather your income records and financial statements (depending whether you are a full doc or low doc applicant).
You need to know what funds you have available to contribute to the transaction.
Your lender will tell you their individual requirements when you apply for a loan. Most lenders require the similar documents.
Home ownership is something that most people aspire to. Understanding home loans is extremely important when choosing one that is right for you. Be sure to do your research before signing any home loan document.
A home is one of the biggest and most important purchases a person makes. A home represents an investment, a living space, and a level of future security. Since most cannot purchase a home outright, home loans are necessary to allow access to the property market. This is why it is important to be informed about what home loans are, what home loan options are available, and where to find home loans.
Home Loan Comparisons
Lenders should provide Key Fact Sheets about their loans that summarises important numbers for easier comparison. Asking for these sheets can reveal a lot of information about the loan. However, this is only the beginning. You should also look at the comparison rate, study amortization tables, consider the current and future state of the home loan market, and look at the quality of service and flexibility of the home loan. Let’s take a look at some of these factors and how to compare them.
What is a Comparison Rate?
When it comes to comparing loans, the most common figure used is the comparison rate, the number that you typically see in loan advertisements and other types of loan marketing. It is tempting to equate the comparison rate with the actual interest rate of the loan, but the two are actually different. As the name implies, the comparison rate is a separate figure that is used to compare different loans. It has both advantages and drawbacks.
The comparison rate is created by combining several different aspects of the loan into one number that attempts to represent the total cost of the loan. By law, lenders are required to include the comparison rate whenever they show a loan interest rate, which is why it is so common to see a mortgage advertised with two different rates. The formula that creates the comparison rate includes factors such as the total amount of the loan, the term length of the loan, how often payments are made, the interest rate (and what type of rate it is), and any fees that apply directly to the loan.
Mix all these costs together, and the result is an adjusted rate that more or less represents the total expense of the loan. The reason that lenders are required to show this rate is that marketed interest rates can sometimes be misleading. A lender may advertise a very low interest rate, but add in high upfront costs, extra fees, or a variable rate structure that leads to much higher payments in the future. The comparison rate helps cut through these tactics and give an honest view of mortgage costs.
Keep in mind that the comparison rate is really only useful when comparing two or more different loans. It does not tell you much about the loan itself. Never make a decision about a mortgage based solely on the comparison rate. Always study the details first.
Other Key Figures to Look At:
Remember, mortgages tend to balance out their costs in the long run so that lenders can count on a profit. This means that very attractive home loan features are often accompanied by less attractive fees and conditions; this why looking at the whole picture is so important. Key figures to compare include:
Interest Rates throughout the Life of the Loan: With a fixed rate loan, the rate and related payments are unlikely to change throughout the life of the loan, making it easier to compare fixed rate loans. Variable rate loans, however, have interest that does change over time, sometimes unpredictably, making them more difficult to compare and requiring closer analysis. Fact Sheets usually include a section that gives an example of how monthly payments could increase if the variable rate rises, but you may want to do your own amortization analysis and ask the advice of a mortgage adviser or broker.
Loan Fees: Loan fees are the fees that are paid when the loan is created or exited. This includes application fees, processing fees, and any other costs involved in the process (home loans may also include various taxes and government charges, which should be compared as well).
Repayments per Month: How much is the starting monthly payment for the loan? How could this monthly payment change (if at all) in the future?
Making a Final Decision
There are many different types of mortgage calculators and comparison tools online that you can use to more closely examine home loans and potential loan scenarios when making your final decisions.
Additionally, take into the level of customer service and features offered by lenders. Read reviews of lenders and mortgage brokers and their practices before making a final decision. The quality of service may not be monetary, but it is still an important part of the overall loan experience.
Do you need a loan for your business, bridging finance, or perhaps want to buy a home? Often principal and interest loans can blow your budget and cash-flow as the payments are so large. Interest only loans from non bank or private finance institutions can assist. Before you turn away from the purchase of a house because the monthly mortgage is too high, consider an interest only home loan.
What are interest only loans?
Interest only loans are those that only require you to pay the interest on the amount you borrowed. For example, if you borrowed $100,000 and the interest is 8% per annul, you would only pay $8,000.00 in interest. The principal is repaid at the end of the term. With some lenders, loans can even be customised where the interest does not need to be paid monthly, ie. it can be paid at the end of the term.
What is an interest only home loan?
When you get a home loan from a traditional mortgage lender, you usually have to pay the interest and principal each month. This is what makes your monthly payments higher, you are effectively repaying the amount borrowed off overtime. With an interest only home loan, you’re monthly mortgage won’t be so high because principal is not included. This can make buying a home or borrowing much for affordable for you in the short term.
Interest only home loan, do you qualify?
While most traditional mortgage lenders won’t approve people for just interest only home loans (they typically will approve an interest only period at the start of the loan), non bank lenders understand the financial situations of people who need an interest only home loan and can often assist. They know these borrowers need a flexible solution and can often customise it to suit their needs.
How can you apply for an interest only home loan?
You can find most information online via lenders websites. You can often contact or make an enquiry online and get a quick yes or no whether you qualify to apply. If approved, funding can be provided swiftly.
Five reasons to get an interest only home loan:
- You can’t afford to pay a monthly mortgage when it includes interest and principal.
- Your bad credit prevents you from getting a traditional home loan.
- You want a fresh approach to financing and need a fast loan.
- You only need the funding short term and will repay the principal at the end of the term.
What terms are used in an interest only loan?
Some of the terms used for interest only loans are:
- Principal – the actual amount you owe on the property,
- Interest – what the lender charges for the loan, usually a percentage of the principal added to the loan, and
- Collateral – what you use to secure the loan.
What are the benefits of an interest only home loan?
The benefits of an interest only home loan vary depending on the situation. A few of them include:
- Lower payments – since you are only paying interest and not the interest and principal of the loan, the payments on an interest only home loan tend to be much lower than a traditional loan.
- Less requirements – since you only pay the interest and your property is collateral, interest only home loans may have less requirements than traditional loans.
- More flexibility – again since you only pay the interest only home loans are more flexible in their terms and conditions. Lenders have more room to work with you on the payments and length of the loan.
What are the drawbacks of an interest only home loan?
Like most home loans interest only home loans have drawbacks as well as benefits. Some of these drawbacks are:
- You only pay the interest. This means that the principal still needs to be paid after the interest is paid.
- You can pay the interest and still not own your property.
- Most interest only loans need to be refinanced after a short time.
Why would you choose interest only loans?
Borrowers often choose interest only loans when they have a good exit strategy to repay the loan at the end of the term. For example you may need to settle on a property or urgent funds, you can take a short term interest only loan and refinance it or repay it via some other means at the end of the term. It makes funding business and investment possible, and pay it off in an commercial way.
What else should you know about interest only loans?
Interest only loans are typically short term loans. This means you must repay within 1 to 24 months, longer terms are often considered on application. As mentioned above, you will also need to make sure you have a strong exit plan, which means you have a strategy to pay the loan back.
Frequently Asked Questions about Interest Only Loans
Who offers interest only loans?
Traditional banks do not normally offer just interest only loans. However, a number of reputable companies do offer these loans.
Who benefits from interest only loans?
- Property investors looking to sell before principal comes due.
- Businesses that need to maintain more revenue during start-up or expansion.
- Expanding companies that are trying to manage expansion costs while adding a new facility.
- Companies in need of a quick influx of revenue.
What are the drawbacks to interest only loans?
The primary downside to interest only loans is the higher payments once the principal comes due. This can be avoided by refinancing or selling the property before the end of the interest only term. If the property value does not appreciate, and create more equity, refinancing can be difficult. This is another drawback to interest only loans. Interest only loans also may have a higher interest rate than traditional loans, due to the higher risk incurred by the lender.
What are investment loans? Basically they are loans for people who want to buy or fund an investment opportunity, be it property or some other investment.
Who does an investment loan suit?
Top 3 reasons to obtain investment loans:
- Investment loans are perfect for people wanting to invest in property.
- You want to have an additional income with an investment, but you have bad credit.
- You need urgent funding so you do not miss out on an investment opportunity.
Anyone can apply for investment loans however they generally need some key criteria. You generally need equity in your property to borrow against or cash to contribute to the borrowings to provide a sufficient loan to value ratio.
Non bank lenders will often be able to provide quicker approvals and look beyond issues with your application like bad credit, lack of financials, short term funding requirements and so forth. Investment loans typically allow borrowers to make more income and repay the loan.
What is the best way apply for investment loans?
The best place to start is online, you can view lenders and their criteria. The steps involved usually include making a quick enquiry to see if you are likely to be approved, filling in an application, once approved and the documents signed funding is provided in days.
What are the requirements for investment loans?
Many of the requirements for investment loans are the same as other more traditional loans. These requirements depend on the individual loan companies but there are some common investment loan requirements. These requirements are:
- You will need some form of collateral. Collateral is something that you offer to secure the loan. If you default on the loan, the loan company collects or sells the security to repay the loan. This only happens if you cannot repay the loan. You can use property, a home and sometimes even a business, or a vehicle as collateral for investment loans.
- A plan to repay the loan. This is usually through things like your employment income, your residual income, or income from a business.
- Another common requirement in investment lending is an investment plan. An investment plan is a plan for what you want to do with the money they loan you. It can be anything from purchasing property to purchasing stocks, bonds, or other securities.
What are some common terms used in applying for investment loans?
There are many terms in the world of investment finance. Some of the most common ones are:
- Interest – interest is simply the amount that you pay for the loan.
- Collateral – mentioned earlier collateral is anything used as security for the loan.
- Investment – an investment is anything that you purchase or acquire with the expectation of a return in the future.
- Equity in property – how much money you have paid towards your loan and how much the property has increased in value.
Investment Property Loans
Investments Properties can be a great financial investment and tool to building wealth. The only problem is when you have a good opportunity and the finance with the banks causes issues. Instead of walking away from a potentially lucrative opportunity, you should consider investment property loans from non bank lenders and private finance companies.
What are investment property loans?
Investment property loans provide money to investors wanting to purchase a property. This property is usually used to make an income by renting or fixing it up to sell it for a higher price. It can be used even to develop it.
When should you seek investment property loans?
You can start applying for investment property loans as soon as you know you want to make a purchase. Non banks can usually provide a verbal conditional approval within hours of running through your scenario of whether they are likely able to assist.
Four reasons to use investment property loans from non banks:
- Banks are too slow;
- Banks have said no;
- You need funds for the short term;
- You have a good exit strategy.
What are the steps to obtaining investment property loans?
- You can speak with a lender for prequalification or you can use a property loan calculator to find out how much you can spend on an investment property.
- Find a property as an investment. You can use undeveloped land, homes, rentals, commercial property, or multifamily property. Almost all types of property that you do not intend to use as a home is considered investment property.
- Decide which type of lender you will need, short term, long term, mortgage, private, or bank lenders. Most financial institutions offer some sort of investment property loan.
- Research the lender you choose. Some lenders have specific guidelines or limitations on investment property loans. It is important to know these guidelines before committing to a specific lender.
- Check the lender’s reputation. Make sure your lender is registered with the various financial regulatory agencies.
How can you increase your chances of receiving investment property loans?
There are several things that you can do to increase your chances of receiving investment property loans. The first is to get organized. The more information you have about the property the better (ie. how much will it rent for? What are the outgoings?). Another thing you can do is to make sure you are not asking to borrow more than you can afford. Finally you can increase your chances by understanding all of the lender’s requirements, asking questions, and making sure you comply with them. If you do not understand something speak to your loan officer, most are happy to explain their requirements to you.
With a variety of terms for different line of credit loans, equity loans, and second mortgages, knowing which is right for you can be confusing. It is important to understand what line of credit loans are and how you can use them. You can then decide if they are the right choice for you.
What are line of credit loans?
Line of credit loans are a secured credit line often approved when you have equity in a home, real estate or property. Equity is the value of the property over the primary mortgage. Example: If your property is worth $100,000 and you owe $50,000, then your equity is $50,000.00 and depending on the lender’s Loan to Value Ratio (LVR) will depend on the line of credit you are eligible for. A line of credit can often be secured by a first mortgage or second mortgage.
How do line of credit loans work?
The lending institution gives you a line of credit up to a certain amount. You can draw on, pay off and re-draw on the line of credit at anytime. The amount varies however is usually up to 65% to 75% of your property’s value.
The first requirement is an applicant must have equity in their property for line of credit loans. If you are borrowing a large sum, you sometimes need to have a strong exit plan to repay the funds or a way to service the loan. It is okay to have bad credit or if a bank has turned you down for a loan in the past, non bank lenders and private finance companies can assist in these circumstances.
Why should you seek line of credit loans from a non bank?
- They are often easier to get than traditional primary mortgages.
- You can use equity in your property as collateral.
- It helps with emergency expenses.
- Business cashflow.
Frequently Asked Questions about Line of Credit Loans
What can you do with a line of credit loan?
- You can make a large purchase with a line of credit loan.
- You can pay off bills, higher interest credit accounts, or business loans.
- You can start a business or purchase one.
- You can use it for pretty much any purchase you need or want.
Who offers line of credit loans?
A variety of financial institutions offer line of credit loans. There are short term and long term lenders, banks, private lenders, and mortgage companies. If you are searching for a line of credit loan ask any financial institution that offers mortgages and other loan options. Most of them will have a line of credit or equity solution. You just have to find the one that offers a program that is right for you.
What are the benefits of line of credit loans?
The benefits of a line of credit loan varies depending on the type of loan and individual lender. Line of credit loans allow people to renovate and make large purchases that they otherwise would not be able to make. You can use these loans to make use of existing equity in your home.
Another valuable benefit of a line of credit loan is that it is similar to revolving credit. If you do not max out the credit line and you repay your balances, the credit remains available.
What are the drawbacks of line of credit loans?
As with any loan there are drawbacks to a line of credit loan. These drawbacks depend a lot on the terms of the loan and the individual lender. The main drawback is that you will not be able to use your home or other property as collateral in any other type of financial dealing. It encumbers the property.
A loan repayment calculator can help you budget your finances effectively. It can tell you exactly how much you will have to pay each month to pay off interest and in some cases the principal amount before the end of the loan’s terms.
What does a loan repayment calculator calculate?
A loan repayment calculator calculates the payment amount you will need to make each month. You can adjust the interest rate, the term of the loan, the amount of the loan and whether you will pay interest only or interest and principal.
Interest only loans make it quite easy to understand your payments. You just times your annual interest rate by the amount you have borrowed and divide it by 12 in order to calculate your monthly payment. With these loans at the end of the term you repay the principal.
The interest on a loan is the percent that a company charges to lend you the money. This percent varies depending on the lenders risk related to collateral, credit history, and the length of the loan. The term or repayment period is the length you have to repay the loan. For example, most short term business loans come with terms between 1 to 12 months.
The benefits of a loan repayment calculator
You can then make an educated decision and understand whether you can or can not afford the loan. If you can then you should proceed in applying to obtain a loan.
Why you should use a loan repayment calculator
- It will help you gain perspective on borrowing.
- It will show you how much a short term loan costs over time.
- It can help you compare different loans in terms of repayment.
- It will show you how interest rates affect the repayment amount.
- It can provide payment amount information.
You shouldn’t need to provide a lot of documents, tax returns and financials when you apply for a commercial loan. Sadly, the banks insist on all this type of information and make the process long and drawn out. With low doc commercial loans, you can relax when it comes to gathering documents.
What are low doc commercial loans?
Low doc means low document. Low document means you don’t need as many documents when applying for a loan. Low doc commercial loans are for people who need money for commercial purposes, but don’t have a lot of documentation to provide. Naturally, some level of documents are required however, by choosing the right lender, it can be minimal.
Who is best suited to low doc commercial loans?
A person who is self-employed, a business owner, a borrower needing quick short term funding, bridging finance application. These are the types of people who are more likely to apply for low doc commercial loans. This is because they may not have enough documentation to provide or they do not have the time. These documents are usually required documents by other bank lending institutions. With low doc commercial loans from non banks, borrowers see more flexibility in the paperwork required.
What are the benefits of low doc commercial loans?
Low doc commercial loans enable borrowers to get the funding they need without the hassle of the banks. With non banks, it is usually a short term loan solution, which means it needs to be re-paid within 1 to 24 months. A strong exit plan and equity in property is important when applying for low doc commercial loans.
How do you apply for low doc commercial loans?
You don’t have to go far to apply for low doc commercial loans. You can do it online from the comfort of your own office or home. Innovative lenders provide a fresh approach to low doc commercial loans and you can get started online by answering some short questions.
Five reasons to apply for low doc commercial loans:
- You don’t have all the required documents other lending institutions request.
- You’re not interested in dealing with going to the banks and waiting weeks for an answer.
- You want your funding quickly.
- You don’t have perfect credit, or you’ve been rejected by other lending institutions.
- You enjoy being able to communicate with a lender online, by phone, or post.
Why Borrowers Love Low Doc Commercial Loans
Low doc commercial loans are a good option for those who have trouble verifying their income, require fast funding or just do not quite fit the banks.
How do low doc commercial loans help your business?
There are many ways low doc commercial loans can help your business including:
Start up costs.
Large equipment purchases.
Most people seeking low doc commercial loans have a plan when they apply. They need the money quickly and easily. If this is something you need, here’s what you need to apply.
What You Need for Low Doc Commercial Loans
Most companies require collateral for low doc commercial loans. That collateral is usually property or a home. In order to secure a loan, your property should have equity, this is the unencumbered value of your property or cash to contribute to the purchase of the property. Generally with a low doc commercial loan you can secure a loan of up to 65% to 75% of your property’s value.
Another requirement for a low doc commercial loan is a strong exit plan. This means you have a viable plan to repay the loan in 1 to 24 months. Usually exit plans are discussed when the loan is originated.
Are you searching for a non-traditional loan? Low doc funding is a great solution for those who need funding fast, but do not want to provide traditional documentation. You probably have heard of low doc loans when researching different lending options. On this page, you can learn a few things that you should expect when applying for one of these different types of low doc funding.
What is low doc funding?
Low doc funding is a loan solution for people who have collateral but not a lot of documentation. Although they tend to carry a higher interest rate and require more collateral, they do not require the paperwork that a traditional loan does. This makes them a great solution for people who have been turned down by banks.
Reasons to apply for low doc funding
There are many reasons why low doc funding is right for you, here are just a few.
- A bank has turned you down.
- You are self employed.
- You have a non-traditional occupation.
- You need quick financing for a project or renovation.
- You have bad credit.
- You need business financing.
What do you need to apply for low doc loans?
What you do not need is a great deal of documentation, however there are a few requirements for this type of loan. First, you must have equity or cash to contribute to the property purchase (loans are generally up to 65% to 75% of a property’s value) or have equity in a current property. This means you need to own property or be buying property, and it has to have value.
You also need a strong exit plan. A strong exit plan requires repayment in 1 to 24 months from the time you take out the loan. The exit plan should detail how you plan to repay the loan (ie. Refinance, sale of property or via lump sum). Other requirements differ from lender to lender.
What are the differences and similarities between low doc loans and traditional loans?
Although low doc loans are not categorised as traditional loans, they do have a few things in common.
Low doc loans provide money for the same purposes that traditional loans do. You can use a low doc loan to purchase property, start a business, or make a large purchase.
Many of the same companies offer both low doc and traditional loans. Most lenders have a variety of loans to suit all types of borrowers. All you have to do is ask what types of loans a company offers.
The main difference between low doc loans and traditional loans are their requirements.
Income verification – low doc loans require very little income verification. This means, detailed business and employment records may not be required.
Valuation – in some cases a formal valuation may not be required and the lender may be able to do “drive by appraisal”.
Low doc loans require a greater down payment or cash or equity. In the case of low doc mortgages, you may need a more money down on the property than you would in a traditional loan.
Interest rates are traditionally higher with a low doc loan. Since the lender is taking more of a risk, the interest rates on a low doc loan may reflect this risk.
Searching for info on Low Doc Home Loans can be frustrating with the lack of details and criteria provided by lenders. This page will provide you with all the right information for you to make an informed decision about applying for Low Doc Home Loans.
What are Low Doc Home Loans?
In a nutshell, Low Doc Home Loans are mortgages that are obtained quickly by providing less documents and supporting information with your loan application. For example when lenders (like the big 4 banks) ask for your supporting documents for a home loan they usually require last 2 year tax returns or financials. With Low Doc Home Loans, this type of information is not a necessity and the loans can be obtained with ease and less headaches and with other information provided.
When to use Low Doc Home Loans
Borrowers who are having difficulty with the banks, or don’t want to go to the banks, are prime candidates for Low Doc Home Loans. This may be because they need fast funding (in days of approval), they may have poor credit history or, as mentioned above, they don’t have tax returns or financials for a full doc loan.
Who can qualify for Low Doc Home Loans?
As these loans are less stringent and more flexible, the LVR or Loan to Value ratio is a little lower than full doc loans. Typical Low Doc Home Loan lenders will lend to 65% to 75% of the property value.
The term of the loans is usually also less as they are a short to medium financial solution, they are not a long term solution. Usual terms for Low Doc Home Loans are 1 to 24 months. Therefore, you need to have an exit plan to repay the loan within the agreed term for example you might refinance by this time into a full doc loan, sell the property or repay by some other means.
Given the short nature of the loans they can be more expensive compared to your traditional funding line.
4 reasons why to use Low Doc Home Loans from non bank lenders
- Funds can be obtained within days of formal approval.
- Security can be a first mortgage, second mortgage or caveat.
- You deal direct with the decision maker.
- The loan criteria can be customised and flexible to your needs.
Who is the typical applicant for low doc loans?
Low doc loans are usually intended to meet the needs of self-employed people or small or medium sized business owners who don’t always have the normal income documentation available. For example, you might own a low cash-flow based business such as retail or direct sales or you may receive a steady stream of income with limited traditional documentation.
What do applicants generally have to provide as documentation?
Low doc loans generally require some form of documentation in order to apply for the loan, however what can be considered is often far more flexible and taken on a case by case basis. For example, one form of documentation that is accepted for low doc loans is a business activity statement (BAS) and an accountants declaration.
Where do you find low doc loans?
Low doc loans are easy to find on the Internet. You can usually obtain information on what is required and what providers have the best reputation. Some provide a verbal yes or no over the phone so you are not wasting your time or theirs. All it takes is a few minutes to answer a few short questions.
Benefits of a low doc home loan
Bank criteria is often hard to meet. Traditional loans often require you to submit financial statements and tax returns. A low doc home loan doesn’t require you to submit all this documentation for financing. You may have to submit a statement or two to justify your income, but it’s much less overwhelming than what traditional home loans require. It may also be that you have credit issues or some other issue where you need a low doc home loan.
Why people seek a low doc home loan?
As we mentioned, people seek a low doc home loan because they don’t want to deal with all the paperwork of a traditional loan with banking institutions. They can get fast and quick finance from private or non bank companies that often provide better personalised service. They want to get their financing as quickly as possible by doing as little as possible which often at times is understandable.
When should you seek a low doc home loan?
When you need the funding or know that something is coming up, touch base with a non bank lender who can assist and get a quick answer over the phone or email whether they are likely able to assist. You can apply from there, funding can often be provided in days of final approval.
All communication is normally done online, email, phone, or post, which makes it easy.
The Benefits of Low Doc Finance
• You don’t need a lot of documentation to apply.
• People with bad credit can apply and are often accepted.
• People who have been rejected by banks can apply for low doc finance.
• They can give you the funds you need to purchase a home quickly and easily.
What do you need for low doc finance?
For low doc finance, you need to have equity in your home or cash to contribute to the purchase. A loan amount can be up to 65% to 75% of your property’s value.
You also need a strong exit plan (sale, refinance, cash flow etc). This strategy ensure you are able to pay off the home loan in a short to medium time. Other requirements vary from lender to lender.
What are low doc home loans Australia for?
These flexible documentation loans can be used for just about anything. Many people or businesses use them for buying real estate, business funding, or making emergency purchases.
More reasons on why to apply for a low doc loan?
There are many reasons why a low doc loan may fit your situation. Some of the most common reasons are:
- You need money extremely quickly.
- You don’t have the typical documentation require to prove your income.
- You don’t want the hassle of applying with a traditional lending institution.
- You’ve been rejected by a bank for a loan.
- Low doc home loans Australia are available to everyone living in Australia to apply.
- They offer a source of funding without a large amount of documentation.
- They are more flexible.
- They offer solutions for those who are self employed.
- They offer loans for those who have non-traditional occupations.
What are the differences between low doc loans Australia and traditional loans?
Low doc loans Australia are loans that require less documentation than traditional loans. There are other differences between the two types of loans:
- It is easier to qualify for low doc loans Australia.
- You don’t need to “fit the box” or provide as much documentation to apply for low doc loans Australia.
- Bad credit is often okay.
- They have a higher interest rate than traditional loans given the risk to the lender.
- They can be extremely quick.
What is a low doc mortgage?
A low doc mortgage is the same as a low doc home loan, its just a different term used. A loan that does not require the traditional financial documentation many banks request is a low doc mortgage. It allows a person who does not have conventional income or information to benefit from a mortgage.
These mortgages can do a number of things. They are useful for obtaining large sums of cash quickly “cash out”, or these loans can be used to start businesses, provide funding for new construction, and allow for major purchases.
Recap, who can use them?
- Self-employed individuals.
- Individuals who are just starting out.
- People who cannot confirm their income.
- People who are in a primary cash business.
One of the biggest financial decisions a person will make in their lifetime is buying a home. Getting a home mortgage and purchasing a house can seem overwhelming. However, the mortgage process does not have to be difficult, provided you find the right product and do your research. The best thing for any future homeowner is to be prepared and educated on the mortgage process and all it entails.
What Is a Mortgage?
A mortgage is an encumbrance on a property that relates to or secures a loan. You borrow money from a lending institution for the sales price of the house you want to buy. After purchasing the house a mortgage is noted on the land title with the money you borrowed and you will normally commence paying your interest payments.
Types of Mortgages Available
Choosing a mortgage type can be somewhat confusing when you first start looking. Fortunately, it gets simpler and the many payment options to choose from become easier to understand. The following lists some of the most common types of loans available to borrowers.
Variable Rate Mortgage—A variable rate mortgage is a home loan in which the interest rate fluctuates over time. The change in the interest rate is based on the current official cash rates set by the Reserve Bank of Australia. This means that the monthly payment can vary from month to month. Borrowers usually have the option of either a standard variable home loan or a basic variable home loan. A standard variable home loan provides some flexibility by offering cheque books, redraw facilities, and the option to make a lump sum payment. A basic variable home loan is a less expensive loan without any of the special offerings seen in the standard variable loans.
Fixed Rate Mortgage —A fixed rate mortgage provides the borrower with a home loan where the interest rate does not change. This is a beneficial loan for anyone who does not like the uncertainty and the rates are certain each month. Lenders often provide a fixed rate for only an initial period ie. five-year period. During that period, the borrower may not be able to make any pre-payments or early payments without facing a penalty.
Split Mortgage Home Loan—This is a mortgage where a portion of the loan is at a fixed rate (as defined above) and the remainder is at a variable rate. This is popular for borrowers who like the two options.
How to Apply for a Mortgage
Decision to apply – Once a mortgage decision has been made, the next step is to apply for the loan. This is a fairly simple process once all of the necessary documentation has been gathered. Borrowers should expect to be asked for their income status, employment history, address, and other personal information.
Get your information ready – The lender is also likely to require information like your credit history, documentation of defaults on previous debts, a calculation of monthly expenses, and a detailed list of assets. Assets would include vehicles, investments, bank accounts, and savings deposits. The lender will take some time to verify all of this information, to ensure everything is accurate. The bank is checking all of this information in order to see if it is beneficial to them to make the loan. If there are problems with any of these records, it could affect the interest rate offered to you or it could affect what lenders will lend to you.
Complete a mortgage application – The next step is to fill out a loan application. Borrowers can fill out a paper application in person at the lender’s office or choose from alternative methods like online. Most reputable banks and lenders will allow customers to apply for a mortgage on their website.
Conditional approval – After an application has been submitted and information verified, the lender will either approve, decline or approve with conditions the loan request. Most banks will not provide borrowers with more than 80 to 90 percent of the property value because of the risk in the property’s value decreasing or if you default on the loan. If a borrower uses the bank to fully finance their home, they will typically be required to pay the lender’s mortgage insurance charges to protect the lender should the loan default.
Valuation – The final stage of the approval process is usually the valuation of the property. The lender will require a property valuer to visit the property and determine if it is suitable for lending purposes.
Documentation of the loan and settlement – After all of those details have been satisfied and the loan has been approved, the lender will issue a letter of offer with the mortgage to the borrower. This document signifies the end of the mortgage application process and contains vital information regarding the loan, including all of the terms and conditions. After the borrower has taken time to thoroughly check the letter, it will need to be signed and returned to the lender. Once the lender receives the letter of offer, the mortgage is officially approved and settlement achieved.
When to get started?
Getting a mortgage approved can be a lengthy process, so it is important to get a head start. Many home buyers get a mortgaged approved well before they even begin house hunting. One thing to keep in mind that the final decision on a home choice needs to be chosen before a loan offer can be made. However, getting the process going ahead of time can provide a faster track to getting into a dream home!
How to Choose the right Mortgage
Not all lending institutions have the same mortgage requirements and conditions. You may not be able to get a mortgage from one bank, but have no problems getting approved from a different lender. Each lender has their own criteria. This is why it is important to shop around when looking for mortgages.
Mortgage brokers? You may want to consider working with a broker. They are familiar with different lenders and their criteria and can help you find a lender that will give you the best rates suited to your position.
How does applying for a mortgage affect my credit file?
The lender will look at your credit score to determine how much of a risk you are as a borrower. Each time you apply with a different lender, the more enquiries will be noted on your file which can play a role in your approval. It is always best not apply for any new credit during the period of applying with one lender. Any changes on your credit report can lead to a delay or even stop the mortgage process. This could cause issues as you are trying to close on your new home.
No credit check business loans may seem difficult to find. However, they are available you just need to know where to look. With the current economic times post GFC, banks are quite strict on business lending. Borrowers looking to start a business or expand an existing one are often declined for funding from the banks. It is the private or non bank lenders and non bank funders who can provide no credit check business loans as they look more to the security available for the loan.
How do no credit check business loans assist small businesses?
Many borrowers have taken hits on their credit reports, and since the banks might not be willing to underwrite further business loans, these other lenders have stepped in to supply the funds borrowers need to start or grow their businesses. These lenders can provide funding in days of applying and in most occasions will not bother with a credit check.
When can you apply for no credit check business loans?
Business customers apply for no credit check business loans when either of the following has occurred or will occur:
- The banks have declined their application;
- The banks will be too slow;
- They have past poor credit history;
- They are currently going through credit issues and need funding;
- They require a low doc solution;
- They need bridging funding.
Among other criteria, you typically require two things before applying. You need sufficient real estate to provide as security for the loan for a secured loan or for an unsecured loan you will generally need strong cash-flow. Second, you need an exit or repayment plan to evidence how you intend on repaying the loan (after all these types of loans are only for a short term i.e. 1 to 24 months).
What are the pros and cons of no credit check business loans?
The pros of no credit check business loans are that people who have bad credit have a better chance of getting a loan. Usually, when people with a poor credit history go to traditional bank, they end up being turned away. With non-banks though that provide no credit check business loans, people who are trying to get back on their feet after financial difficulties are able to do so. Another pro of no credit check business loans is that having too many checks on your credit report is not a good thing. Sometimes, you can lose point on your credit score because of it. You don’t have to worry about that with this type of loan though.
The cons of no credit check business loans is that they usually come with higher interest rates. These interest rates mean you have to pay more on top of the amount that is borrowed. Most borrowers know about these interest rate differences, so they are prepared to deal with them when they borrow money.
All the information you need about No Doc home loans is right here. If you are looking for a provider or you are just after some more details you’re on the right site.
What are No Doc Home Loans?
No Doc Home Loans is basically a term used for mortgage loans that are obtained with fewer documents than a full doc loan. Contrary to what the name suggests, a borrower does need to provide a small amount of documents that are required however it is minimal compared to what the banks require on a full doc loan. Often financials or tax returns are not required for No Doc Home Loans however obtaining a loan literally with no documents is not possible.
No Doc Home Loans are mainly provided by non-banks or private lenders as they are usually more flexible lenders and can structure loans to your specific needs. They can typically be secured by first or second mortgages or caveat loans.
Why do borrowers get No Doc Home Loans?
As mentioned, borrowers obtain No Doc Home Loans from alternate lenders. This is typically because these borrowers do not have access or time to access mainstream bank funding. This may be because they don’t have time to wait weeks for the banks, they only require funding for a short period, they don’t have financials for the banks or their credit is impaired. There can be many factors but, as you can see, No Doc Home Loans from private lenders can surely be a useful finance product.
Who can apply for No Doc Home Loans?
Borrowers have a few boxes to tick before applying. The main requirement is to have equity in your property or cash to contribute to the purchase of a property. non bank lenders normally lend to a maximum of 65% or 75% of the total properties vale.
The next most important requirement is having a repayment strategy. You need to tell the lender how you intend on repaying and explain your plan. There are other requirements however the above are key.
Review, When to apply for No Doc Home Loans:
- When you lack documents for a full document loan (tax returns or financials).
- When funds are required fast (sometimes within days).
- When funds are needed for a short period of time.
- When you have an exit plan.
- When banks are not an option.
Given the above features of No Doc Home Loans, it is understandable that this style of funding can be more expensive than your banks or credit unions.
No Doc Loans: The Solution to Easy, Quick Finance
As we mentioned, no doc loans are perfect for you if you are looking for a way to borrow money without submitting a lot of documentation. However, many people decide to pursue low doc loans because they don’t have the time, energy, or means to furnish all the paperwork traditional lending institutions require.
What are the differences between no doc loans and traditional loans?
- They do not require the amount of paperwork that traditional loans do.
- They are more flexible than traditional loans.
- Bad credit is often okay.
- Being self employed is okay with no doc loans.
- They have a higher interest rate than traditional loans.
- They work better for people who do not want to provide a lot of financial information.
The No Doc Home Equity Loan Makes Borrowing Easy
Verifying your income can be difficult if you’re self-employed. This can make getting a loan from a traditional bank seem impossible. Luckily, there’s a type of loan that can assist– a no doc home equity loan. The no doc home equity loan doesn’t require as much documentation a traditional bank does, and the criteria to qualify for the loan is much easier.
What is a no doc home equity loan?
No doc refers to no or not much documentation. In reality there always is some level of documents required. Equity is the value of your current property after subtracting all liens against it. Knowing these two terms can help you understand what a no doc home equity loan is – it’s a home equity loan that doesn’t require as much documentation.
How does a no doc home equity loan work?
A no doc home equity loan works just like a regular home loan with a few key differences. In addition to requiring less documentation than ordinary loans, they also tend to have higher interest rates. This is due to the risks the lender is taking by not requiring a lot of documentation. Most no doc loans also require a strong exit plan, which is a strategy for paying back the loan.
If you can’t get a loan from a traditional bank because of bad credit, lack of financials or other reasons, your best bet is to obtain one from non conforming lenders. Below will assist you in understanding this type of lender and whether they are right for you.
Who are non conforming lenders?
Non conforming lenders work with people who have been turned down by a traditional bank for a loan. They understand the financial hardships many people or businesses struggle with, so they are much more willing to look at other factors when deciding if a borrower or businesses can obtain a loan. They can be extremely flexible and can often customise a loan suited to the borrower.
What is the criteria involved with non conforming lenders?
The type of finance discussed on this page relates to secured finance. You will need to see other pages on non secured finance if you do not have security. Borrowers must have sufficient equity in their property or cash to contribute to the property purchase, loans are provided usually up to 65% to 75% of the property’s value.
How do people apply for loans with non conforming lenders?
It’s far less stressful and hassle free to apply for a loan with non conforming lenders. You can usually get a quick yes or no over the phone whether you are eligible to apply. If you are approved, funding can be within days. The best way to start is simply provide your scenario online through the lenders website. It should only takes a few minutes and within two hours, you will normally receive a verbal approval.
This type of funding is great if:
- You lack financials;
- You have poor credit;
- You need funding in days;
- You need funding for a shorter term (1 to 12 months);
- You need finance but do not have your financial or tax returns in order.
Why are non conforming home loan lenders so useful?
The loans provided by non conforming home loan lenders are specifically designed or customised to help people with less than desirable credit, no financials or a short term financial need. While the terms may be more expensive than traditional banks have, it’s usually worth it when you can secure a loan for your purpose.
Are you eligible to apply to non conforming home loan lenders?
It only takes a few minutes to enquire and often a verbal “yes” or “no” is provided whether you can apply for this type of loan with our non conforming home loan lenders. It’s mainly online, so you can easily provide the information required from the comfort of your home or office. If you have any questions, these lenders are available via email or phone.
Four reasons to use non conforming home loan lenders:
- You can’t get approval from a traditional bank because you have bad credit.
- The standard lending criteria for lending institutions has made it impossible for you to get approved.
- You want a quick approval and fast funding.
- You need non conforming home loan lenders that help people Australia wide.
Who are non conforming lenders Australia?
They are private or non bank individuals or companies. They are qualified lenders that work with people who for one reason or another, fall outside the strict guidelines of a traditional lending company. It may be bad credit, no financials or the need for short term funding, these non conforming lenders Australia fill a gap in the market.
Who can non conforming lenders Australia help?
There are many reasons why people can’t get a traditional mortgage loan. They may have an injury that prevents them from working, less than perfect credit, a low document income source or simply be self-employed. They may be new to Australia or have recently gone through a divorce. The above and many more, non conforming lenders Australia may be the best way to obtain a home loan.
When do you need non conforming lenders Australia?
You’ve found a home you want to purchase, but you can’t get financing through a traditional mortgage lender. You can then turn to non conforming lenders Australia to find out if you can get the financing you need to purchase the home. You can typically get a verbal conditional approval on the phone whether they can assist and funding in days or formal approval.
Before applying for Non-conforming home loans it’s important to know what they are. This page will tell you exactly how and will help you go about applying for one.
What are Non-Conforming Home Loans?
As the name suggest, they are a finance product, usually provided by non-bank lenders or private lenders, for people who do not conform to the strict bank criteria. Non-Conforming home loans often have more flexible criteria and can often be customised to suit your specific needs.
When to apply for non-conforming home loans?
When the banks have said no or if you know the big banks will say no without even applying. Non-conforming home loans can assist people with numerous issues including bad credit, no tax returns, no financials, when the banks will take too long and so forth.
If you only need the funding for a short term or if you need it quickly (I.e. within days) nonconforming home loans from private non-bank lenders can also be very useful. Non confirming home loans can often be more expensive however they allow people to obtain a home loan when they ordinarily would not have been able to.
Review, why do people get non-conforming home loans:
- Speed (they are extremely quick).
- Short term (1 to 24 months usually).
- Bad credit (is considered).
- Lack of paperwork (financials).
Who can qualify for non-conforming home loans?
These loans can be for most purposes including business however there are requirements or criteria. The main criteria is you must have enough equity or cash to keep the loan to value ratio (LVR) at a max of 65 to 75% or less.
What types of home loans for bad credit are available?
There are several types of nontraditional loans available for people with bad credit. Before applying for a home loan with bad credit, you have to weigh the benefits and drawbacks of each loan.
- Long term home loans – these loans are usually for 25 to 30 years. Most home loans are long term loans.
- Short term home loans – these loans are paid back quickly, usually in one to two years. You can use short term home loans to purchase a home now if you are still searching for a long term home loan. You usually refinance short term home loans before the term of the loan is up.
- Bridging loans – bridging loans are like short term loans but are specifically meant for bridging the gap between selling an existing home and purchasing a new one.
All of these loans are available, even if you have bad credit. You will need to consider the loans carefully to decide which one is right for you.
What are the pros and cons of home loans for bad credit?
The nice thing about home loans bad credit is that you can get these loans even though your credit history is not perfect. The other benefit is that it gives you chance to improve your credit. When you get a loan and pay it off, it is seen as a good thing, and it could lead you to approvals in the future.
The disadvantage is that these loans come with higher interest rates.
Frequently Asked Questions about Non Conforming Lenders
Many non conforming lenders have websites, brick and mortar stores, and are available by phone. There are many non conforming lenders and it is important to find the non conforming lender that is right for you. Each lender will be slightly different. Non conforming lenders require have different requirements depending on the type of loan you choose. Each lender is unique. When you decide on which type of loan, you want to ask what their exact requirements are.
What are some terms that non conforming lenders use?
Interest – this is a percentage added to the loan that is paid to the lender with each payment made.
Security – It can also be called collateral which is property that is used to guarantee the loan such as a home, business, property, or car. Lenders often use security and collateral interchangeably.
Closing costs – these are costs that you pay before receiving the loan. Sometimes lenders call these loan origination fees. These are paid to the lender, broker or title insurance company (if any).
Pros of a non conforming mortgages:
Non conforming mortgages are suited for unconventional borrowers. Unconventional borrowers are people who have bad or no credit, no collateral, and little or no documentation.
Non conforming mortgages offer flexible terms. Unlike conventional mortgages non conforming mortgages do not necessarily follow a formula. The lack of structure gives lenders the ability change the terms of the mortgage to suit the borrower.
Unlike traditional mortgages, non conforming mortgages are sometimes used as a bridge between getting a mortgage to purchase property immediately and getting other financing.
Cons of non conforming mortgages:
Non conforming mortgages very often have higher than average interest rates. Since a nonconforming mortgage poses a higher risk to lenders, lenders increase the interest rate to compensate for the risk.
These mortgages may have shorter repayment terms. This is not necessarily a disadvantage but to some who are borrowing a lot it is a factor to consider. Sometimes nonconforming mortgages are just a stopgap until you find other financing.
Often, people need a little extra money to get them through a tight spot. Sometimes it might be to consolidate debts. Sometimes it may be to make emergency repairs. And, sometimes it might be to cover unexpected medical bills. Whatever the case, having access to a personal loan is often not only convenient, but necessary. So, what kinds of personal loan options are out there, and what are the benefits and pitfalls of each?
The most common form of a personal loan is a credit card. Credit cards are one of the easiest ways to get financing for anything a borrower might want or need (within their credit limits, of course). Credit cards advertisements come into view even when borrowers are not actively seeking financing. Given their relative convenience and the ease with which they can be obtained, credit cards are a popular personal lending choice for millions of consumers.
However, credit cards often have very high interest rates compared to other forms of financing. While many bank loans have single digit interest rates (even for personal loans), credit card rates for that same borrower can easily be in the low teens. While that may not seem like a significant difference, over time that difference can add up to thousands of dollars in interest payments.
Unsecured Personal Loans
Another common source of personal funding is the unsecured personal loan. These loans are similar in many ways to unsecured credit cards in that they do not require collateral and are based on the borrower’s creditworthiness. These are often excellent loans for emergencies, specific and non-recurring expenses, or consolidating other bills.
However, these loans tend to have relatively short repayment periods and fairly high interest rates. They may feature interest that is lower than a credit card (primarily because they are typically not revolving credit lines like credit cards), but these rates are still fairly high compared to secured loan types.
Another source of personal financing that has recently become popular is the peer-to-peer loan. In these loan arrangements, a financing agreement is created between two individuals (as opposed to an individual and a banking institution). Usually this arrangement is facilitated by a service that acts as matchmaker between potential lenders or investors and borrowers. The service charges a small transaction fee and acts to collect all sensitive information between the lender and borrower.
Peer-to-peer lending often creates lower interest rates and more flexible repayment terms for the borrower than more traditional loans offered by institutional banks. However, these loans typically require the borrower to have excellent credit. Also, the peer-to-peer model may not allow as much flexibility in the event of an emergency situation, such as a period of unemployment or another situation that would make repayment difficult for a few months.
Debt Consolidation loans
Sometimes, a personal loan can be useful for specific purposes. Lenders may also prefer lending for these specific purposes, particularly if they will put the lender in a better financial position or are the subject of special programs. For example, Debt consolidation, holiday, student, and other types of specific purpose loans may vary greatly from one type to another. Variations may include terms, interest, repayment periods, features, and other criteria. Those interested in obtaining such a loan should shop around with multiple lenders to find the best possible deal and ensure that the loan type they seek is the best option for the intended purpose.
More Information on Personal Loans
For more information on personal loans, interested borrowers have many resources at their disposal. It is also wise to ask lenders to provide fact sheets about the lending products they offer so that one can compare among both that institution’s products and those offered by other lenders.
Another invaluable source of information regarding personal loans is a financial professional. Whether with a finance broker, financial advisor, an accountant, or even bank personnel, speaking with dedicated and qualified professionals can help potential borrowers learn about the costs and benefits of different personal loan options. Seeking professional advice can make selecting the most appropriate personal loan much easier, particularly for those who do not have an extensive background in financing options.
Small Personal Loans
From time to time, people find themselves in need of a little extra cash. Whether it is to cover an unexpected bill or to provide a little breathing room in tight financial circumstances, a personal loan can be a great option for many borrowers. Not every borrower needs to take a large personal loan, such as the ones typically offered by banks. For those who only need a small amount of financial assistance, what types of personal loans are available?
A way to obtain a fairly small personal loan quickly and with minimal paperwork or delay is the payday advance. Payday advance loans are typically for small amounts that are paid back over the borrower’s next payday. See our dedicated payday loan page for more www.funding.com.au/payday-loans.
Personal Loans for Bad Credit
Personal loans are a tremendous resource for those in financial need. They can be used for everything from consolidating debts to paying unexpected medical bills and even for paying tuition or for vacations. But, these loans typically require the borrower to have well established credit with an excellent credit score. After all, these loans are normally granted based solely on the borrower’s creditworthiness and willingness to repay the debt.
However there are options, even for those with less than perfect credit (or a thin credit history). To determine if a personal loan for bad credit is the best option, one must first understand what constitutes bad credit, the options available, and the possible consequences of taking such a loan.
What is Bad Credit?
According to Veda, a credit reporting agency, one’s credit file (sometimes also called a “credit report”) does not rate a borrower’s credit as good or bad. Instead, it simply provides a record of one’s past credit experiences, including the kinds and numbers of inquiries, applications for various types of credits, outstanding debts, and any defaults that may have occurred within the past five years.
It is possible to obtain a copy of one’s own credit report. Doing so is an excellent idea to check one’s own credit history and to determine if it includes any inaccuracies or other information that may be adversely affecting that person’s ability to obtain financing.
Are There Personal Loan Options for Borrowers with Bad Credit?
There are several types of personal loans available to those with less-than-perfect credit. However borrowers require security or a lender who is willing to consider their poor credit. The best way to approach a lender is by being upfront and ask about their lending guideline relating to bad credit.
Private lenders are finance companies who lend their funds to borrowers who cannot go to the banks.
Why use private lenders?
There are numerous reasons why people can’t go to the banks however the main reasons include the banks will take too long and the funding is urgent, the borrower has bad credit or the bank’s requirements are too stringent. This page will inform you on private lenders, who they are and where up find them.
Firstly, a few tips:
- Find a company that specialises in private lenders and loans. Either find a lender directly or find a broker who knows the ins and outs.
- Get an idea of the fees first. This allows you to know exactly what you are up for and what to expect.
- Try not to shop around too much as it can affect your credibility among private lenders. The industry is not that large and often lenders will see the same borrower’s loan from different brokers.
- Understand what documents you will need to provide right from the start. It can be stressful for you if you keep finding more and more documents are required along the way.
Who can apply to private lenders?
Borrowers can apply to private lenders for numerous purposes for finance. The main requirement is that there is real estate security and you have a good repayment plan or exit strategy in place.
The real estate must have satisfactory equity in the value. Private lenders will usually secure their funds by either a first mortgage or second mortgage and lend up to 65% to 75% of the property’s value.
How much are private lenders?
They are more expensive than banks. Don’t expect the same rates or fees. As we said, understand it is funding for urgent or short to medium term situations and you need to know the costs before moving ahead.
What do private lenders loans look like?
These types of loans are usually structured to your specific needs however the guidelines are:
- Term: between 1 to 12 months (longer terms considered on application);
- Loan Amounts: between $20,000 to $1m (larger amounts considered on application);
- Loan to Value Ratio (LVR): 65% to 75% of security properties value.
What is a private lender?
They are finance companies or individuals who lend their own funds directly to non-conforming borrowers. They are far more flexible than the banks, can lend on first mortgage security, second mortgage security or a caveat, they make quick lending assessments and usually can customise or tailor the loan to a borrower’s specific needs. You can often negotiate the length of the term and in some cases the rate and charges.
Why use a private lender?
It mainly comes down to a few reasons, below are the most common ones:
- You need the money fast, in a matter of days, not weeks or months like if you were to use the main banks. A private lender can provide funds literally within days of approval.
- You only need the funds for a short period of time. It may be for 1 month, it may be for 12 or somewhere in between. Loans from a private lender are not long term products.
- You do not have financials or tax returns. Most credit unions or banking institutions want to see all your personal and financial information. A private lender is far more flexible and rarely need any of this information.
- You have bad credit issues. A private lender can often look beyond this.
Who can qualify for funding with a private lender?
A private lender assess a borrower’s loan on a case by case basis however the key requirements are you have enough equity in your property and you have an exit strategy to pay back the funds at the end of the term. The amount of equity in your property is known as the loan to value ratio.
Recap on when to use private lender:
- If you need a flexible finance solution.
- If you need fast funding.
- If you need short term funding.
- If you have issues with the banks.
How do private home loan lenders differ from banks?
- Private home loan lenders are privately funded. This means they do not report to other agencies like banks do.
- They are more flexible. They offer different terms and rates than banks do.
- Private loans have higher interest rates. Since they take more risks, their interest rates are higher than banks.
- They offer a second chance. If a bank turns you down, these lenders can help you rebuild your credit as long as you pay off the money you borrow.
- Private home loan lenders have different loan requirements.
Banks turn down a lot of people or some borrowers just fit outside the box. These borrowers often feel frustrated and discontent with the entire process. Private home loan lenders can help these borrowers if they have been turned down by banks or don’t fit their criteria. They provide bad credit mortgage and low document loans. Traditional lending institutions require a lot of paperwork for a loan, but private home loan lenders usually have a short application process and require less documentation. This makes it perfect for people who have a difficult time verifying their income in traditional ways.
Who is the average borrower for private mortgage lenders?
Business owners, builders, developers, investors and many other types of borrowers use private mortgage lenders.
Why are the rates higher with private mortgage lenders?
Private mortgage lenders take a risk when they loan money to people with less than perfect credit or a lower amount of documents to support their application. To offset this risk, they loan money with higher interest rates than traditional banks. They also require that borrowers have a good exit plan. This is a strategy that ensures loan repayment is possible.
More reasons to Use Private Mortgage Lenders
- You have bad credit.
- You have been turned down by banks.
- Bridging finance.
- You need funding within a few days.
Some of the differences in the terms are:
- Flexible interest – banks usually only offer the prime interest rate with a variety of conditions.
- Flexible repayment terms – banks are very structured in their repayment terms.
- Flexible criteria – banks turn down those with bad credit or no credit or lack of documents.
- More options – bank loans are usually strict in what they offer.
- Less hoops – banks have a number of steps to their loans, which is time consuming.
Recap on Private Money Lenders
You can get money quickly. You don’t need to go through the banks. There are other options available such as private money lenders.
Some of them don’t even realize they can get a loan or mortgage elsewhere until they stumble upon private money lenders. Some people have bad credit, which would make it difficult to get a traditional loan or mortgage, so they turn to private money lenders. The inability to verify income is another reason people seek these lenders for cash. They usually don’t require a lot of documentation.
Many people who have dealt with traditional lending institutions in the past are frustrated with the experience. They would often be interested to know they can seek finance through private lending. It’s an easier way to get the cash you need without all the hassle. If you’re wondering if private lending is for you, keep reading to find out what it is, who can use it, and how you can find out how to apply.
What is private lending?
Private lending is when private companies, funds and individuals offer financing to people who need it. They offer loans and mortgages, just like traditional banks do however they set their own, more flexible criteria.
What’s the difference between private lending and traditional banks?
- Private lending criteria is not as strict as traditional lending.
- People with bad credit can usually get financing.
- Even if people are turned down by banks, private lenders can approve them.
- Private lenders don’t need all of the documentation traditional banks insist on.
- Private lending helps people get the money they need quick and easy.
Who uses private lending?
Business owners, property investors, builders, developers, people with bad credit and those turned down by banks are the ones that usually turn to private lending. Those aren’t the only people though; people who don’t like going through traditional institutions for one reason or another will often turn to private lending. Sometimes you just don’t want to or can’t go to the banks.
What do you need to know about private lending?
Private lending can be more expensive than traditional lending. Since private lenders take a risk by offering loans and mortgages to people to those turned down by banks or who fall outside the banks, they charge higher interest rates. They also usually require a strong exit plan, which is a strategy to pay off the loan. More equity in the security property or more cash is necessary to contribute to the deal (ie. more collateral). Most private lenders will only offer up to 65 to 75% LVR (loan to value ratio).
How do you find out if you can get private lending?
Browse the web and find lenders online. Lenders usually lend in all states. Normally, if formally approved, you could have the money you need within days, which is much faster than traditional banks.
A private loan is something that many people need at some stage. These people worry their less than perfect credit or their lack of documents or time will stop them from getting any type of loan, but that’s simply not the case. There are many types of loans available, and a private loan may be the solution to your problem. Before obtaining a private loan though, some research is necessary.
What is a private loan?
A private loan is a loan from a private individual or a private company who lends to borrowers who fall outside bank lending. This means that the funding is not provided by the banks and is more flexible than a traditional bank loan. A private loan approves and finances loans based on their own independent criteria.
How does a private loan work?
A private loan works much like a regular bank loan with a few key differences.
- Private loans are more flexible. The criteria for obtaining a private loan are less strict and it is usually easier to obtain one.
- A private loan carries more risks to the lender. Lenders take more risks to provide more flexible terms.
- A private loan interest rate is higher. Lenders make money by charging slightly higher interest rates to offset the risks of offering loans.
- Private loans are a solution for those with bad credit. Private lenders can help you rebuild your credit if you repay the loan on time and in full.
- Private loans are available on an urgent basis. There are online private lenders that offer loans Australia wide.
What do you need to obtain a private loan?
To obtain a private loan, you need to have a few keys things. Most private lenders require some form of collateral. This means you have to have something to guarantee the loan with sufficient value in it. i.e. one form of collateral is equity in property.
You will also need to have a strong exit plan. This means you need to be able to repay the loan on time and show how you intend on doing so. Different loans have different repayment options such as repayment in 1 to 24 months. You will need to go over your exit plan with a private lender.
What You Need to Know About Private Home Loans
Private home loans offer a variety of different solutions for purchasing a property and real estate. Before you get a private home loan, it’s important you know what private home loans are, what they do, and how they work.
What are private home loans?
Private home loans are financing solutions made available from individuals and private companies for property. These private home loans are not associated with banks, so many people find them to be much easier to apply for.
What are the key reasons people use private home loans?
- They have bad credit.
- They need funding in days.
- They are self-employed or have a non-traditional job and cannot provide traditional documentation required by banks.
- They were turned down by banks for a home loan.
- They do not want to go through the lengthy bank process for a mortgage.
- They need terms that are more flexible.
What are the differences between private home loans and bank home loans?
The major difference between private home loans and bank loans is the flexibility. A private lender can change terms and customise loans to suit their clients. Some private home loans require a larger down payment than bank loans to offset the cost of the loan however they are far more flexible.
Keep in mind, private home loans are more expensive than traditional bank home loans. They charge a higher interest rate, which makes the loan more expensive over time.
Somewhere along the way you have heard the term private mortgages. Whether a friend, family member or finance broker has told you about them it’s good you now know. This type of funding can be an extremely useful tool to deal with a specific financial need.
So, what are private mortgages?
As the name suggests, they are mortgage loans obtained from private organisations or companies instead of going to the main banks, credit unions or big bank lenders. These private companies are quick at making decisions and you can talk directly to the decision maker instead of a bank employee who needs 5 departments above them to sign off on your loan.
When should someone use private mortgages?
Basically when the banks can’t help you and you need mortgage funding. Banks might have knocked you back or you may already know what their answer would be if you applied. It may be that you need the funding in days, you need the funding only for a short period or you need the funding and you have bad credit. Private mortgages are for you.
How do you qualify for private mortgages?
Typically, the main requirements are the following:
- Equity in your real estate asset. Lenders assess your loan based on their risk lending against the value in your real property, be it your home, business premises, property purchase or investment property.
- You need to have a plan! You have to tell the lender how you intend to pay back the loan. This is commonly referred to as your “exit strategy”. Know what this is before approaching a lender (i.e. from the sale of a property or business, refinance or cash flow).
Loan terms are short term, one month to twelve months usually; they are not to be used as long term debt strategies.
What do private mortgages cost?
Given the nature of the loans described above, you can see they are customised products structured to your specific needs. Because on this and because they are short term they are more expensive than banks or credit unions.
Recap: 5 reasons why to use private mortgages:
1. They are fast.
2. Less hassle.
3. Short term solutions.
4. Bad credit considered.
5. Flexible and structured.
They can be obtained with far less paperwork than banks and you can get the funds very quickly, sometimes within days of approval. The terms on the loans are much shorter (i.e. 1 to 12 months) as they are not long term finance solutions.
Why would I get a private mortgage?
There are plenty of reasons why people can’t use the banks or need alternate finance like a private mortgage.
The most common reasons for obtaining a private mortgage are:
- Banks will be too slow. You need the funds quickly.
- You only need the money for a short amount of time. There’s no point setting up a long term bank loan.
- You have bad credit.
- Your accountant has not completed your tax returns or financials required by the bank.
Who provides private mortgage finance?
As we touched on earlier, it’s the non-bank lenders who provide private mortgage loans. These lenders have to comply with the same finance laws as the banks however can be a little more flexible and can think out of the box. There is no red tape as most of the time these alternate lenders are small businesses themselves.
Where do you find these lenders?
The best place to start is online, googling, exactly how you found this page. Online you will see the lenders rates and their general lending criteria.
Who can use private mortgage funding?
Almost anyone can use private mortgage funding. Borrowers with bad credit, a need for fast funding, low document requirements, poor history with the banks and so on. Some borrowers have gone to the bank only to be faced with a rejection when they apply for a home loan. Other people know they won’t get approved, so they don’t even try the banks. People who don’t have a lot of traditionally verified income will usually turn to private mortgage funding. Since private lenders aren’t as regimented, they don’t require as much documentation, which makes getting a loan easy and quick.
What else do you need to know about private mortgage funding?
- A strong exit plan is necessary. This plan is the way you will pay off the loan.
- You will need to pay higher interest rates on private mortgage funding.
- You may have additional fees because of the alternative funding option.
- Approval time is much shorter than traditional banks. You can get a verbal decision within 2 hours.
- You can get the money you need within days.
Property and Private Mortgage Lending
Many people want to finance a business or property, but when they go to the bank, they are disappointed when they hear they aren’t approved for financing. If this sounds like you’re situation, don’t worry there is a solution, you could likely use private mortgage lending.
What do you need for private mortgage lending?
You don’t need all the paperwork the banks require to obtain private mortgage lending. All you need is basic financial information to complete the application and equity or cash to contribute to the deal. You also need a strong exit plan. This exit plan is a strategy on how you are going to repay the borrowed amount.
Are you searching for a lender who provides second mortgages? This page will help you find second mortgages and what to look out for.
What are second mortgages?
They are basically a loan that is secured on your real estate property behind another current mortgage you may have. They are usually only short term solutions and the loan can be obtained within days of approval.
Why do people use second mortgages?
The reasons for second mortgages are endless, however here are just a few:
- Business cash flow.
- ATO debts.
- House renovations.
- Construction costs.
- Bridging finance.
They are usually obtained when borrowers need quick and hassle free funding and can’t go to the banks.
How do you get second mortgages from lenders?
Most lenders these days are online and you can submit your scenario and get an answer within hours.
They will usually issue a no obligation loan offer outlining the terms and costs. If you are satisfied with the terms sign the offer and return it to the lender. They will then do some checks and enquiries and provided they prove satisfactory they will proceed with issuing the documents and settlement of the loan.
When should a borrower get a second mortgage?
Usually when they require the funding quickly. Sometimes you are stuck in a position where the banks can’t help, you need finance and you know how you are going to pay it back.
Sometimes the banks just cannot act fast enough or you may have a bad credit history or track record. A second mortgage loan can assist you in getting over these hurdles.
The loans are usually taken out for a period between 1 and 12 months and they provide a short to medium term fix. They are not a long term finance solution.
Requirements for a second mortgage?
The main requirements to apply are (amongst other things);
- That you have enough equity in your real estate. Lenders will typically lend up to 65 to 75% of the security properties value (less the first mortgage amount).
- That you have a strong plan to repay the funds. This is usually by sale, refinance or by lump sum payment from other means.
Where to start? Online?
A second mortgage is provided by private or non-bank lending companies. The banks do not provide this custom style of funding.
Online you can peruse lenders sites; see their fees and so on. These online second mortgage lenders usually lend right across Australia so you don’t need to visit an office or find a local lender.
Are they offered Australia wide?
A second mortgage is available in Australia in every state. They will vary slightly given the land titling system is different in each state or territory however the effect is the same. It is a loan on top of a primary mortgage. With a second mortgage, you have two mortgages on the same property. This allows you to access the equity built up by paying down the primary mortgage.
More reasons for a second mortgage in Australia
Although there are many reasons to borrow from the equity in your home, these are some common ones:
- Consolidate bills.
- Undertake a large project.
- Renovate the property to improve its value.
- Start a business.
- Purchase another property.
- Pay off other debts.
- Rebuild your credit.
What type of companies are second mortgage lenders?
Second mortgage lenders are lending institutions that offer mortgages in addition to the one borrowers already have. These mortgages are usually riskier to the second mortgage lenders because rank behind a first mortgage lender.
Why use these lenders?
Second tier lenders understand that people need money for various financial situations and fast. They don’t fault you for not being accepted by banks. They even approve applications from people with bad credit. They work with applicants to help them get the money they need quickly and easily.
How do second mortgage loans actually work?
Second mortgage loans use existing equity in your home. Equity is the value of your home minus the existing mortgage. When you have equity in your home, it is available to help you with your financial goals. Borrowing against this equity can help you pay off expenses, high rate credit cards, or other larger bills.
What if you already have a second mortgage and need to refinance?
If you currently have a second mortgage you may be in need of a refinance. Refinancing a second mortgage is often easier the second time as you know the process.
Due to a variety of reasons, some borrowers who have an existing second mortgage in need of a refinance. It can:
- Lower payments.
- Extend the term of repayment if the current second mortgage has expired.
- Provide more cash out.
- Be used to obtain a better interest rate.
- Help with large expenses.
- Pay for a renovation.
- Establish a home equity line of credit.
- Help you establish better credit.
When to refinance second mortgage?
Second mortgages can be difficult to afford over a long period of time as they carry a higher interest rate. If you’ve tried to seek financial help from a traditional bank but have been rejected, you could benefit from a refinance. You need to have a strong repayment plan to show how you intend to repay the loan at the end of the term (refinance, sale, lump sum).
You may have heard the term short term debt related to business or personal finance. It is important to understand what it is and how it affects you. Read on below for more on short term debt.
What is short term debt?
Short term debt is any debt which has to be repaid within a short period after receiving the short term loan. When balancing your financials, it is a liability on your balance sheet. Although it may not seem like it, this debt can be good. The amount of short term debt can be an indicator of financial health. It can be used to quickly move on an opportunity, expand a business, start a business and so forth.
How does short term debt determine financial health?
Whether or not a company or person has the ability to pay back a loan is a good indicator of how they are doing financially. If there is enough capital to repay short term debt then a company or a person is financially healthy. If there is too little capital to pay off the debt, then the company or person is not in great financial health. Most short term lenders look to the borrower’s exit strategy and security in determining whether to approve their loan. With good security and a strong exit strategy applicants have a good chance in obtaining debt.
How is short term debt incurred?
Short term debt is usually provided by non bank or private finance companies. The banks often can not act quick enough and only offer long term debt solutions with hefty break penalties.
These are the reasons you need short term debt:
- You need cash quickly.
- It allows you to take advantage of an opportunity.
- It helps cover business expansion costs.
- It can help improve your financial health.
What do people use short term debt for?
People use short term debt in many ways. Here are just some of the ways they do:
- To fund a new business.
- They can use it as a bridge loan to make a large purchase before selling another one.
- To pay off debt with high interest rates.
- They can be used to get out of a difficult financial situation.
- These loans are used to help pay for emergencies.
What else you should know about short term debt
These loans do come with higher interest rates, but many people decide that these rates are acceptable because they are able to get the money they need when they need it.
This is something to keep in mind. The faster you pay off your loan, the less money you will pay in interest. That’s why it’s so important to have a plan for how you will pay back the loan when you are approved.
What are the pros and cons of short term debt?
The pros of short term debts is that they can help people in bad financial situations. People have used these loans for many reasons such as pay for emergencies, pay off debt, or make a purchase that was needed.
The cons are that they can be hard to budget because they are expensive. The other con is that you must pay it back within the terms or you’ll end up losing your collateral.
Many people often weigh the risks and benefits before moving forward with these loans. They find that the benefits far exceed the risks. Working with a lender will usually help you find a loan that works for you as well.
Frequently Asked Questions about Short Term Debt
These FAQ can help answer any remaining questions you may have about short term debt.
What if I have bad credit? Bad credit can prevent some people from getting a loan from a bank, but there are lenders who will provide these loans to those with bad credit. Don’t become discouraged if you’ve been turned down by traditional lending institutions – there are solutions.
What if I don’t have a lot of documentation about my earnings? That’s no problem for some select lenders. As a low doc lender, it’s quite common for to look at other means of income documents.
Is there anything I can do to improve my chances of getting approved? Yes, it’s important to complete the application with accurate information. One of things that slows lenders down is verifying information and if it all checks out, that speeds up the process.
Do you need short term funding for a cash shortage? Below will explain all there is to know about short term funding and where you can secure it today.
What is short term funding?
To break it down, short term funding is basically a non-bank style of finance, it is extremely quick and provided by non conforming lenders. The funds are only lent for a short period and therefore lenders charge higher rates than the banks long term loans.
Why apply for short term funding?
Short term funding is mainly for borrowers who don’t want to or cannot go to the big banks. This could be for many reasons but below are the most common:
- They only need funds for short term and therefore there is no point in setting up a 5 or 10 year loan with the bank.
- They may not have time to wait for bank approval which can be weeks.
- They may have credit issues that private lenders will overlook.
- They may not have the financial documents available that the banks require.
When to apply for short term funding?
When you need money ASAP and not for a long term.
You need to have a repayment strategy, i.e. a plan on how you will pay the funds back at the end of the term (terms are usually 1 to 12 month).
For secured funding, you need to have sufficient real estate security to the secure the loan. Loans can be secured by first mortgage or caveat second mortgages.
Who provides short term funding?
As mentioned, it’s the non-bank private lenders that can assist with short term funding. They make quick decisions and give you quick answers.
Learn How to Find Short Term Funds for Your Business
Short term funds provide business owners the money they need to do many things including start, expand or cashflow their businesses. Not only do they provide cash to make purchases, but they also give businesses the ability to take advantage of opportunities or busy periods.
How can businesses use short term funds?
There are many reasons for obtaining short term funds, the following are some of the ways people use short term funds:
- Purchase equipment for a new business.
- Replenish supplies.
- Buy a vehicle for business use.
- Pay off debt.
What do you need to apply for short term funds?
As we mentioned above, to receive short term funds, you’ll usually need security. For example you need to have equity in your property. Most lenders will lend up to 65 to 75% of your property’s value. You will also need a strong exit plan. An exit plan is a strategy you will implement to pay off the loan within the time stated in the loan terms. Unlike the banks, lack of trading history, no financials, bad credit and other issues are usually no problem.
Who are short term lenders?
They are normally:
- Non banks;
- Private lenders;
- Mortgage funds;
- Super fund lenders.
Why is it beneficial to use short term lenders?
Short term lenders understand the urgency you face when needing funding only for a short period. They can provide a flexible and customised solution without the hassle of the banks. Short term lenders also know that some people don’t have perfect credit, financials or trading history. They specialize in helping people who require special attention.
How long does it take to get a loan from short term lenders?
You can find out if you can get a loan normally within a couple of hours. If formally approved, you can have the cash you need typically in just a few days. It is far quicker than traditional lending institutions, which makes it worth the extra cost of using a short term financing option.
More reasons to use short term lending
As we said, there are many uses for this form of lending.
- Emergencies – Sometimes you need cash to deal with a crisis.
- Unexpected bills – If a business vehicle breaks down or an unplanned bill pops up, short term lending can help you.
- Large purchases – it can help you make large purchases affordable.
- New business costs – it can be used as capital to start a business.
Who commonly uses short term lending?
Short term lending is often used by business owners who know they can repay within the term. When they need money for their business, a loan can provide it to them quickly. Other applicants also can also include:
- Property owners;
- Start up funding.
Short term loans can help businesses or people without being tied to a loan for a long period of time. If you’re in need of funds and have a plan to pay it back quickly, short term loans may be for you.
What do you need to know about short term loans?
Short term loans are loans that you generally pay back within 12 months. While most people don’t borrow a large sum of money with short term loans, they can typically be between $20,000.00 to $500,000.00. Further funds are considered by lenders on application case by case.
When applying for short term loans, it’s important you have a strong exit plan or strategy. This pay back strategy ensures your loan will be paid off according to the loan’s terms and on time. The most common exit plans are sale of the security property, business cash flow, receipt of a lump sum, refinance and so forth.
Most secured lenders only provide short term loans secured against real estate. By having this security, it allows the lender to be more flexible than the banks and not having the need to consider balance sheets, financials and credit history. Most loans are up to a max of 65% to 75% of the property’s value. Keep in mind there are unsecured options available based on your turnover.
What are short term loans used for?
Short term loans are used for any legitimate business purpose including purchase equipment, stock, working capital, supplies for a business or for a business premises. They are also used to pay off business debts. These loans can prove to be a major relief to some borrowers.
How is a short term loan different from a long term loan?
A short term loan has slightly different terms than their longer, bank-affiliated counterparts. A short term loan has a slight to moderately higher interest rate than a long term loan.
These are reasons the interest rate is higher:
- The lender takes a greater risk on a short term loan.
- They are less strict about the loan recipient’s qualifications.
- The shorter the repayment period, the less profitable the loan is long term.
As we said above, a short term loan has a shorter repayment period, which is usually 1 to 12 months.
Things to know about a short term loan:
- A short term loan is usually easier to qualifiy for.
- Bad credit or lack of financials is usually okay.
- It’s an option if a bank turns you down.
- A short term loan can have a higher interest rate, but the cost is outweighed by the opportunity.
- It can provide a quick source of cash when you need it, particularly in an emergency.
What do you need to know about short term business finance?
They are interest only loans, interest can often be capitalized or paid at the end of the term, and at the end you exit the loan repaying the principal. Many borrowers decide to get this type of financing because it can be great for business expansion or opportunities when a 10-year bank loan doesn’t suit. They are usually provided by non bank lenders and are extremely quick.
Can people with no financials or bad credit receive short term business finance?
As these loans are provided by non-bank lenders, typical things that are required by the banks like 2 year trading financials and good credit are not a necessity. The loan is mainly based on the security and the exit plan amongst other things.
What are the benefits of a short term business loan?
Short term business loans are available within days. With an innovative company, most times if you enquire over the phone or online you can have a pretty quick verbal decision in as little as 2 hours.
What are the risks of a short term business loan?
Knowing how these loans work and ensuring you borrow responsibly eliminates the risk involved. You generally need a strong exit strategy to repay the short-term business loan on time. If you do not and an extension is not granted, the security you provide for the loan is at risk.
More reasons to use short term business loan:
Reasons to get a short term business loan:
- They provide funding in an emergency.
- They are flexible to obtain.
- They can help you start a business.
- They can provide funding for large purchases or inventory.
- They can help pay for incidental or unexpected expenses.
You’re a small business looking around for funding. The banks are really difficult to deal with as they prefer big business and in most cases see small business as too much of a risk. This is where small business funding from non-bank lenders comes into play.
Step 1 understand what small business funding is.
Small business funding is basically a loan to a company or enterprise to assist it with its operations. It can be for many reasons including:
- Cash flow.
- Pay creditors.
- ATO debts.
- Refinance debts.
Non-bank lenders often assist with small business funding by having flexible criteria and offer secured and non-secured options.
With secured options, by having real estate security they do not need to assess the viability of the business like the banks do. They can provide immediate small business funding within days of approval.
They can also assist with non-conforming borrowers who do not have trading history, have bad credit or who need the funding in days not weeks. Small business operators in these situations cannot access bank funding.
Step 2 – When can a small business apply?
There are main requirements for small business funding:
- A legitimate business purpose.
- Sufficient real estate security (if secured option).
- Sufficient cash flow (if unsecured options).
- An exit strategy.
An exit strategy is basically a plan on how you intend on repaying the small business funding. Loans from these lenders are usually 1 to 12 months and typical exit strategies are sale of the real estate, refinance to the banks once you have trading history or cash flow.
Who provides small business funding?
As we said, it’s the private lenders who provide this type of funding. They are flexible, nimble and can provide a customised loan within days. You deal direct with the lender and get immediate decisions.
Recap why to get small business funding?
- When you can’t go to the banks.
- When you need short to medium term funding.
- If you have credit problems.
- Lack of financials.
What are the main terms used in small business finance Australia?
Terms will vary between areas and lenders. It is a good to know some of the more common terms lenders use before applying for small business finance.
- Financing term – this is the length of the loan. It can be a long term loan or a short term loan. Short term financing is more popular for small business loans.
- Interest – interest is the term for how much the loan costs. The higher the interest rate the more you pay for the loan. High risk loans have high interest rates, while low risk loans have lower interest rates.
- Closing – this is when the final paperwork is signed and after all of the terms are agreed on. Sometimes there are closing costs associated with closing the loan.
- Payment – these are weekly, monthly, quarterly, or yearly installments.
- Principal – the principal of a loan is the primary amount owed.
What do you need to use small business finance Australia?
In order to use small business finance Australia, there are a few things that you will need.
- A small business – Although there are some different definitions of this, a small business is usually defined as a business that has less than 50 employees. You can have a partnership, small corporation, or a sole proprietorship.
- The need for a loan – Make sure you have a plan for the financing. You can use the financing for startup costs, equipment costs, unexpected costs, advertising costs, inventory, or a variety of other things.
- An exit plan – this is a way to repay the loan. It is a good idea to know how you are going to repay the financing before you apply for it. You can use things like business income, other employment income, or some other income. Many lenders ask for this plan during the loan application process.
Solicitor loans are an older term for private finance. This page will tell you all there is to know about solicitor loans and assist you in going about applying for one.
What are solicitor loans?
They are or were basically private mortgage loans obtained through a solicitor’s office. A lot of laws changed the way this type of finance is obtained and instead of going to the solicitor you usually now go direct to the lender or a broker and the solicitor gets involved further down the track.
The style of solicitor loans remains a quick and flexible form of funding for people who do not want to go to the banks. We will refer to solicitor loans below however keep the above in mind that it is an old term for today’s private funding.
Why get solicitor loans?
As we mentioned, solicitor loans are a quick and easy way to get a first mortgage, second mortgage or caveat loan. Some people just can’t go to the banks. Common reasons are:
- The banks require too much paperwork and financials a borrower might not have. Solicitor loans don’t.
- The borrower may have bad credit. Solicitor loans look beyond this.
- The borrower might not have time to wait weeks for the banks. These loans can take days from approval.
- A borrower may only need the funds for a short period of time and these loans are short term loans from between 1 and 12 months.
So when you need a hassle free solution to a funding need think solicitor loans.
Who provides solicitor loans?
As we mentioned, solicitor loans are provided from private lenders who have their own funds. They can customise loans to your specific needs and they make the ultimate lending decision. Once they are ready to advance you funding, they will instruct the solicitor to issue the loan documents and arrange settlement.
How do you qualify for solicitor loans?
You generally need a few basic requirements when applying for these loans.
The first, you must have real estate security for the loan. The loan to value ratio is generally between 65 and 75% of the property value.
The second is you must have a repayment plan. This is how you intend on repaying the loan and can be things like a refinance to a main stream funder, sale of the property or by other means.
More reasons to obtain solicitor finance?
Here are 5 more reasons:
- It can take days to get funds, not weeks like the banks.
- These style of loans are very flexible and can be customised to your needs.
- Unlike the banks, if you do not have tax returns or financials it doesn’t mean you can’t get a loan. These loans are low Doc.
- Bad credit or poor history is understandable and often overlooked.
- If you only need funds for the short term.
When to apply for solicitor finance?
Apply for this type of finance when you need the funding quickly and easy.
Start up business is exciting. However the pressures of not having capital can be stressful. Our company is here to assist you with start-up capital, from gathering information to applying for start-up capital.
What is start-up capital and loans?
It is a form of funding or loan that assists start-ups to take their business to the next stage. Banks often see start up business as a big risk and decline to offer a financial product for this market. It is alternate lenders and funders that cater for the needs of start-up capital.
Who qualifies for start-up capital?
Business borrowers who need funding for any purpose, whether it be cash flow help, capital for expansion or starting, paying creditors or ATO debts and the list goes on.
Lenders have different requirements, however you normally need to have two main requirements to apply:
- Property as collateral for the loan. Private funders who provide start-up capital assess your loan, amongst other things, on the security rather than the strength of the business (in contrast to the banks looking to the strength of the business).
- You need to explain how you will repay the start-up capital. Be it cash flow, sale of a property or refinance.
The other criteria can be extremely flexible and suited to your start-ups needs.
Why use start-up capital?
If you cannot access bank finance, start-ups often cannot, then you need to look at non-traditional sources of finance.
Start-up Loans and funding
Start-ups are exciting. It’s a crucial stage in a business’s life and often make or break. Because the business is in such an infant stage start up loans are often hard to find as lenders see them as risky business.
Who provides start up loans?
The big banks overlook this lending because they see it as too risky. Private or non bank lenders on the other hand will assess the loan on the security rather than the merits of the start-up. They can provide start up loans in a flexible way and sometimes within days of approval.
Why do businesses use start up loans?
They can be used for any purpose within a business however they can usually include:
- Starting capital.
- Cash flow.
- Ongoing debts.
- Employee wages.
The list goes on for what start up loans can be used for.
When can a business apply for start-up loans?
Generally at any stage, even if the business hasn’t started trading yet.
How Start Up Loans Can Help a New Business
When you start a small business, you need to consider whether or not you want a start up loan. There are many types and sources for start up loans and it is important to choose the right lender carefully who can help you grow. Deciding what is good for you and your business is a crucial part of being a small business owner.
When you think about expanding or growing a business, the first thing you think is it will cost money. There are many steps to starting and growing a business. One of the most important steps is securing start up business loans. Without start up business loans, it can be prove very difficult to take a business to the next level.
What types of start up business loans are there?
Banks, short-term lenders, and credit agencies all offer products for start up business loans. Below is a list of some facilities that start ups can look at.
- Short-term loans – loans that require quick repayment, but are fast and easy to get with bad credit.
- Long-term loans – loans that require repayment over a longer duration than short-term loans.
- Line-of-credit – revolving line-of-credit loans, repaid in installments, similar to a credit card.
- Small business loans – small long or short-term loans for small businesses only.
- Large business loans – large loans that are usually for long-term repayment.
- Equity loans – Using equity in property to secure a loan for a business startup.
Although many other types of loans exist, these are the most common. You can also apply for combination of loans or venture capital and investment. Usually lenders require collateral or a guaranteed return on their investment before lending money.
5 more uses for start up business loans:
1. Purchasing inventory.
2. Advertising fees.
3. License and certification costs.
4. Insurance costs.
5. Location rental or purchase.
What are short-term small business start up loans?
A short-term small business start up loan is a loan that you repay in a short amount of time, usually 1 to 6 months. These loans require equity in property or collateral. These loans are for a quick cash infusion to start a business. You want to look into a short-term business start up loan when the bank turned you down, you have no trading history or when your credit is bad.
How does a small business start up loan work?
The process usually is as follows:
- The initial enquiry, the lender will advise whether they are likely to be able to assist and fees.
- The application and supporting documents are submitted.
- A conditional loan approval is provided and accepted.
- The lender does its homework, unconditionally approves and then loan documents are signed.
- Funds are deposited to your account within days.
Many traditional lenders take weeks or months to approve a small business start up loan and the answer is often no. Sometimes, a borrower’s credit history is what slows down the process or lack of trading history or lack of stability. These lenders provide a “less questions asked” type loan and take security over real estate.
Where do you apply for a business start up loan?
There are different ways to apply for a business start up loan. Old school short-term loan offices and banks have physical locations. You usually make an appointment and go to the location fill out an application. This can be quite inconvenient for you if you have a busy schedule. This is why modern companies have everything you need to apply for a business start up loan on their website. You usually can complete the application and within two hours, you’ll receive a verbal decision.
Structured asset finance is a form of business funding that borrowers Australia wide take advantage of. Can you benefit from it? Want to learn more? Below will assist you in understanding this asset finance and where to find it.
What is structured asset finance?
Structured asset finance is a funding program in which you use an asset as collateral to secure a loan. This type of financing usually uses real property or in some cases vehicles or equipment. Unlike ordinary bank financing, asset finance has flexible repayment guidelines. The loans are usually short term and repaid typically within a maximum of 12 months of receiving the funds.
Who uses structured asset finance?
Small business owners often use short term structured asset finance to start their business, purchase equipment, fund advertising, expand or buy inventory and so on. Private investor’s use structured asset finance to make large purchases, renovate property, or use the money for an emergency.
What do you need for structured asset finance?
Different financial institutions have different criteria for structured asset financing. A short term lender usually offers loans at a slightly higher rate because of the short term nature and the quick approval times. The finance is often provided in days of formal approval. For structured asset finance secured over real estate you need sufficient equity in your property (loans vary up to 65% to 75% of the property value).
Why You Should Use Our Structured Asset Finance Services:
- Bad credit is okay.
- Low doc.
- Your bank has refused you a loan.
- You need money within days.
- Business expansion.
There’s much more to learn about our structured asset finance services and many more reasons why businesses utilise this option.
In finance, you often hear the word equity. When you apply for a loan, mortgage a home, or engage in other financial decisions, it is important to understand what equity means exactly and how it works for you.
What is equity?
When you are talking about a loan or other financial matters, equity is the value of your property minus what you owe. For example, if your property is worth 50,000 dollars and you owe 20,000 dollars, your equity is 30,000 dollars. If you want to calculate equity, you can use this simple equation: (current value of the property) – (amount owed) = (equity). There are a few other factors involved in calculating equity, but this will give you a general idea of the equity in your property.
What is equity used for?
Lenders use equity to calculate how much they can lend to you on secured loan basis. Collateral is an asset used to guarantee repayment of a loan. If you default on the loan the property is often sold for repayment.
How to Make Equity Work for You
The equity you have in a property sits there until you sell your property. Borrowing against the equity is one way you can make it work for you without selling your property. Using it to secure a loan increases your borrowing power. For example, typical short term lenders will lend up to 65 to 75% of the value of the property. This gives you more borrowing power than you would have otherwise.
Reasons to Use Equity
- You can use it to secure a small business loan.
- You can use it to finance a short term finance need.
- It increases your borrowing power.
- It is not being used for anything else.
When you need money or investment advice, you need a financial services expert. Financial services exist to help you plan and manage your finances. The companies that provide these services range from lenders to investment brokers and banks.
What are financial services?
Financial services is a broad term for companies that manage money. Any company that is in the business of lending, investing, or anything else to do with money provides financial services.
What are some examples of financial services?
- Loans – money given for a specific purpose and repaid over time.
- Mortgages – money given for purchase of a home or property.
- Investments – used for future financial benefits.
- Accounts – stored money.
- Insurance – a way to protect money.
These are the basic types of financial services. Most other forms are subcategories of these.
Who takes advantage of financial services?
Almost everyone takes advantage of these services. Most companies and individuals need a company that provides these services eventually.
Who provides financial services?
Many financial institutions provide finance services from public to private organisations.
Cash Flow Finance for your business is often crucial. It can ease you through your day to day operations and often bridge that gap between your receivables and outgoings.
What is cash flow finance?
It’s a type of business loan that is provided to help the monthly incoming and outgoing cash flow short fall. It can be extremely useful and can often allow a business to continue to operate during slim times. This type of finance is generally not provided by the banks, it’s the non-traditional finance companies that provide cash flow finance to everyday Aussie businesses.
Who provides this type finance?
It’s the alternate lenders primarily, not the big 4 banks. The banks are slow and by the time you have waited weeks for them to approve some cash flow finance it’s usually too late.
Non-bank finance providers can often provide cash flow finance within days of approval and look beyond the criteria the banks usually insist on.
Why does a business apply for cash flow finance?
Good question! This finance can be for any business purpose to help your business or to use within you operations.
Using cash flow finance you:
Can get cash for your business in days;
Can borrow for a short to medium term (1 to 12 months);
Don’t need all the paperwork and financials (non-bank funders are very flexible);
Can have bad credit and still be considered.
When can a business apply for cash flow finance?
For unsecured cash flow finance options, you need generally a few requirements:
You need to have a certain level of monthly income. The loan is assessed on this basis.
You need a bank account or merchant facilities.
For secured cash flow finance, you need two main conditions satisfied before applying:
Firstly, you need security to secure the loan. It can be a first or second mortgage or a caveat.
Secondly, you need to have a plan to repay the loan at the end of the term. This can be sale of the property, refinance or from cash flow.
Facts about cash flow finance
You’ve already read some information on the facts about cash flow loans, here are some key facts:
Cash-flow finance can be easy to get, if you know where to look.
You don’t have to have perfect credit to get these loans.
This finance can make it possible to make a large purchase before selling another large asset.
You don’t have to have the best financial record to receive funding via this means.
If you are not paying principal monthly, you do need to have a strong exit plan, which is a strategy on how you’re going to pay off the loan.
Why are cash flow loans processed so quickly?
Businesses applying for these loans need it for a reason. If they could wait then there would be no need for cash flow finance. These decisions cannot wait weeks or months, so that’s why cash flow loans are pushed through processing at a quicker pace. It’s not always about the lending institution, it’s about the borrower who really needs the money to assist with their financial situation.
What are the pros and cons of fast cash-flow loans?
The pros of these loans are that they can help you purchase what you need in the time when you need it and it can be paid back quickly. People love the ease of getting the cash they need because sometimes, time is critical.
The cons is that it can be more expensive, so some people need to make adjustments to the amount of money they borrow.
Frequently asked questions about fast cash flow finance
How fast are the cash flow loans? Approval can be made within hours, and funding can be delivered in days.
Do you need anything special for cash flow loans? You do need a strong exit plan. You also need equity in your property because that’s how you determine how much you can borrow.
What happens after you get the loan? After you get the loan, you can use the money any way you wish. You will receive instructions on how to commence your payments.
Most banks and finance companies charge an interest rate to make money. An interest rate is usually an annual or monthly percentage calculated on the amount you borrow. This page discusses and compares interest rates in Australia.
What is an interest rate?
An interest Rate differs on a business loan differently to a standard home loan. In Australia, an interest rate on a standard home loan is usually set by the big banks in contrast to the Reserve Bank of Australia’s official cash rate, this rate is set by economic indicators. Business rates, specially with non bank lenders, is based on risk and supply and demand. Non bank lenders set their interest rate in Australia higher than the traditional banks, as they are far more flexible and can provide a loan on a low doc, fast basis.
How an interest rate is set.
An interest rate can be either a variable interest rate or a fixed interest rate or a mix of both. Variable interest rates go up with market fluctuations, they can be beneficial if the rate goes down and allows for flexibility. Fixed interest rates are set at the same value for the entire term of the loan and can be good as they ad stability or certainty. Most loans with non bank lenders are at fixed interest rates.
It is all too confusing comparing interest rates in Australia?
Many people get overwhelmed about interest rates Australia. Don’t let it scare you. This is something that all borrowers go through and comparison rates or loan fact sheets are designed to help. The best tip is to understand how much you can afford a month, week or fortnight. Do yourself a favour and complete a weekly budget on yourself with expenses and income.
What are the pros and cons of comparing interest rates?
The pros are some lenders are able to give you better interest rates than others, even if you have bad credit or some other non conforming factor. Another pro is that when you know what the interest rate is, you can budget for it.
The cons are it can be very confusing and hard to choose from the many options. This is when you need to speak to an expert.
Those seeking financing have more options today than ever before. Similarly, investors interested in making money in a different, higher interest manner may like the idea of peer-to-peer lending. However answering questions like what is it? how does it work? and are there any special considerations or other protections in place? is important.
What is Peer-to-Peer Lending?
Peer-to-peer lending is much like bank lending; however, instead of being between a large institution and a borrower, it is between two “peers” meaning people (although it can usually be via a company). There is no incumbent bank in the middle between the loan and the funding. It is an excellent means for creditworthy borrowers to get financing, often at better interest rates than the banks and with more flexible terms than they would find at an institutional bank. It is also a great way for investors to make considerably more interest than would be available from most other forms of investing, and the investment is significantly safer than other options with comparable rates of return.
Typically, it is a service that connects lenders or investors with borrowers and is usually done so via an online platform. This provides a means of keeping individuals’ respective personal information confidential while allowing for the necessary credit checks and fund transfers. It also makes the task of pairing lenders and borrowers much simpler for the people involved.
Most people use peer-to-peer lending because of the favourable terms on both sides of the deal. As we mentioned borrowers can often find financing at rates that are significantly below the market average. Meanwhile, lenders can see returns several points higher than anything they could hope to get from a savings account, CD, or other low-risk investment. The key difference is the speed and the underlying technology used by the platforms.
How Does Peer-to-Peer Lending Work?
Typically, lenders register for a service that matches lenders and borrowers. There are different levels of involvement, ie. some platforms handle the entire borrowing approval and just pay investors a set interest rate for participating or with some platforms, once registered, the lenders can select options such as acceptable credit scores, amounts they wish to lend, and agreeable payment terms. They can browse listings and get a feel for the loans and any security available. For those who have never engaged in peer-to-peer lending before, most of these sites are designed to walk the lender through the process, so no advanced understanding of lending practices is required. Once the registration is complete, the prospective lender pays the amount they wish to put towards the loans, then monitors and collects the interest from their investment.
Borrowers, on the other hand, go through a similar process to the typical loan application they would find on banks’ websites. The borrower selects the financing product they desire etc. Just as with a bank loan, the borrower then selects the amount they want to borrow, fills out a credit application, and is then approved (or not) based on their loan application, security and creditworthiness. Generally, peer-to-peer lending is best for those with good credit, security or strong serviceability. The interest rates and terms available may be much more flexible than those available from major banking institutions, making them much more attractive to those who qualify.
Typically, the borrower and the lender never meet in person; everything is done through agents of the peer-to-peer service or online. Aside from names and other information necessary to finalise the transaction, most personal information is kept private for the safety of both the lender and the borrower. This information is held in confidence by the lending institution and can be used to enforce the lending agreement should a disagreement later occur.
Other Considerations for Peer-to-Peer Lending?
One of the concerns for parties involved in peer-to-peer lending is the legal protection afforded to the parties. This will depend on the security for the loan and the structure of the platform. Does the platform hold the loan in their name for the lender or does the lender hold the loan in their own entity? It can vary greatly. Many of these services will handle everything for the entire process of originating, collection, and enforcement for a lender, while others leave enforcement to the lender.
Regardless of the service level offered, loans created through these services are every bit as enforceable as anything created by an institutional bank. A full contract is created between the parties (often with the service involved as a third party). In the event of a default by either party, the agreement can be enforced in a court of law and any security provided recovered against. Similarly, the peer-to-peer lending service may provide other functions useful to the loan enforcement process, like credit reporting and collection calls.
Who suits Peer to Peer Lending?
Peer to peer lending can be for the masses. Usually, financial savvy individuals will weigh the pluses and minuses of banks versus peer to peer lending and then choose the one that will benefit them more. For example, if someone can borrow more from a peer lender than a bank and get a lower interest rate, than peer lending makes more sense.
As you are seeking peer to peer lending, make sure to research the lender and site you are using. You don’t want to end up being taken advantage of by people who aren’t reliable or untrustworthy. By finding the right company, you can find that this option is better than any other one you can find at a traditional lending institution.
Copyright © Disclaimer – this website is operated by funding.com.au Pty Ltd ABN 33 603 756 547 (trading as funding.com.au). All information on finance products displayed on this website are for business purposes unless otherwise stated. Any finance product stated for consumer/personal purposes, the information is provided by Lawcorp Mortgage Securities Pty Ltd A.C.N. 161 218 720 an authorised credit representative under the National Consumer Credit Protection Act 2009. See credit guide for more details. Site terms and conditions apply.
Personal information about visitors to our site is collected only when knowingly submitted. For example, we may need to collect such information to provide you with further services or to answer or forward any requests or enquiries. It is our intention that this policy will protect your personal information from being dealt with in any way that is inconsistent with applicable privacy laws in Australia.
Apart from where you have consented or disclosure is necessary to achieve the purpose for which it was submitted, personal information may be disclosed in special situations where we have reason to believe that doing so is necessary to identify, contact or bring legal action against anyone damaging, injuring, or interfering (intentionally or unintentionally) with our rights or property, users, or anyone else who could be harmed by such activities. Also, we may disclose personal information when we believe in good faith that the law requires disclosure.
We may engage third parties to provide you with goods or services on our behalf. In that circumstance, we may disclose your personal information to those third parties in order to meet your request for goods or services.
We strive to ensure the security, integrity and privacy of personal information submitted to our sites, and we review and update our security measures in light of current technologies. Unfortunately, no data transmission over the Internet can be guaranteed to be totally secure.
However, we will endeavour to take all reasonable steps to protect the personal information you may transmit to us or from our online products and services. Once we do receive your transmission, we will also make our best efforts to ensure its security on our systems.
In addition, our employees and the contractors who provide services related to our information systems are obliged to respect the confidentiality of any personal information held by us. However, we will not be held responsible for events arising from unauthorised access to your personal information.
We will endeavour to take all reasonable steps to keep secure any information which we hold about you, and to keep this information accurate and up to date. If, at any time, you discover that information held about you is incorrect, you may contact us to have the information corrected.
In addition, our employees and the contractors who provide services related to our information systems are obliged to respect the confidentiality of any personal information held by us.
Links to other sites
We provide links to Web sites outside of our web sites, as well as to third party Web sites. These linked sites are not under our control, and we cannot accept responsibility for the conduct of companies linked to our website. Before disclosing your personal information on any other website, we advise you to examine the terms and conditions of using that Web site and its privacy statement.
Further privacy information.
For more information about privacy issues in Australia and protecting your privacy, visit the Australian Federal Privacy Commissioner’s web site. http://www.privacy.gov.au/
How Google uses data when you use our partners’ sites or apps – see more here – http://www.google.com/policies/privacy/partners/
Privacy loan conditions
We may collect, use, hold and disclose personal and credit information about you for the purposes of arranging or providing credit to you, managing that credit, direct marketing of products and services by us and managing our relationship with you.
Credit information includes the type and amount of credit provided to you, repayment history information, default information (including overdue payments) and court information. Personal information includes any information from which your identity is apparent.
Consumer and commercial credit information
We may exchange your commercial and consumer credit information other entities to assess an application for consumer or commercial credit and manage that credit. In particular, we can obtain credit information about you from a CRB providing both consumer and commercial credit information.
Exchange information with credit providers
We may exchange your personal and credit information with other credit providers or credit assistance providers for the purposes of assessing your creditworthiness, loan application, credit standing, and credit history or credit capacity.
Exchange information with guarantors
We, third parties, lenders or lenders mortgage insurers may exchange your personal and credit information with any person who proposes to guarantee or has guaranteed repayment of any credit provided to you.
- Finance brokers, mortgage managers, and persons who assist us to provide products to you.
- Financial consultants, accountants, lawyers and advisers.
- Any industry body, tribunal, court or otherwise in connection with any complaint regarding the approval or management of your loan – for example if a complaint is lodged about us or the lender.
- Businesses assisting us with funding for loans.
- Trade insurers.
- Any person where we are required by law to do so.
- Any of our associates, related entities or contractors.
- Your referees, such as your employer, to verify information you have provided.
- Any person considering acquiring an interest in our business or assets.
- Any organisation providing online verification of your identity.
We may disclose personal information about you to an organisation providing verification of your identity, including on-line verification of your identity.
We may verify your identity using information held by a CRB. To do this we may disclose personal information such as your name, date of birth, and address to the CRB to obtain an assessment of whether that personal information matches information held by the CRB. The CRB may give us a report on that assessment and to do so may use personal information about you and other individuals in their files. Alternative means of verifying your identity may be available on request. If we are unable to verify your identity using information held by a CRB we will provide you with a notice to this effect and give you the opportunity to contact the CRB to update your information held by them.
PRIVACY / DECLARATION
By agreeing online and ticking yes, or by making any loan application with us or by applying for credit you agree and declare:
I/We and any guarantors are all aged over 18 years. The information set out in the application or otherwise provided about me/us and any guarantor is true and correct and will be relied on.
I/We consent to the disclosure of this application and any loan information (including statements of account, requests for payment, etc) before during or after the loan to any guarantor.
I/We acknowledge that commissions may be payable by lenders to us for the loan, insurance and other services provided in connection with the loan.
When deciding on different loan options, one question that often comes up is whether it is better to seek secured or an unsecured loans. Each has its own benefits, but they each also have their own potential drawbacks. Moreover, each type of loan is not always available from every lending institution.
It is important to know that other options may be available from another lender and to become acquainted with the various types of loans.
What is a Secured Loan?
A secured loan is quite simply a loan where repayment is almost guaranteed, or “secured,” by the pledge of a piece of collateral. Collateral can take multiple forms, from a piece of property to a cash deposit. For example, a mortgage or car loan uses the pledge of property to secure the repayment (i.e., failure to pay results in forfeiture of the securing asset).
Secured loans are often much more flexible and readily available to those with poor or inadequate credit. Because repayment is secured by the pledge of property, the lender is at less risk in the event of a default. Thus, lenders are more likely to extend financing, will offer flexible terms, and may grant larger loan amounts (provided they comply with responsible lending laws).
Secured loans are not just for buying new property. For example, home refinancing and home equity loans are both forms of secured loans. Secured loans can be for either a fixed period of time or can a line of credit, where a facility is approved and a borrower can draw and re-draw on it as and when they please.
What is an Unsecured Loan?
As the name implies, an unsecured loan is a loan where repayment is not secured by a pledge of collateral. Unsecured loans can take many forms, but common examples include credit cards, student loans, and personal loans. These loans are based on the borrower’s creditworthiness, serviceability and contractual agreement to repay.
Where to Get a Secured or Unsecured Loan
It is important to understand that secured and unsecured loans are not always offered by the same types of institutions. It may not be possible to obtain unsecured financing at an institution that is accustomed to dealing with secured transactions, and vice versa.
All too often, borrowers fail to shop for the best deal or do not fully understand the options available. Thus, they may take a personal loan with a higher interest rate when they would be much better off getting a line of credit secured with their home. Conversely, borrowers may become frustrated and experience disappointment if they try to get unsecured financing for larger expenses where a secured loan may be the better option.
The best bet to explore all of a borrower’s options is to research what is available online. Sites may provide additional insights into the differences and benefits of various borrowing options, as well as providing the best places to look for each. Extensive research helps borrowers avoid time consuming and potentially expensive mistakes when seeking the ideal financing product for their situations.
When you need fast funding, you have a number of short term finance options. It is important to understand the best solution and the pros and cons.
What are your short term finance options?
Short term finance options and features generally look as follows:
- You can receive funds quickly (sometimes within days).
- You’ll have to repay the funding within a maximum term (i.e. 1 to 12 months).
- You need a good exit strategy to show how you will repay the loan.
- You can use short term finance options for just about anything having to do with your business.
- They are provided by flexible non bank lenders.
- You don’t need all criteria banks usually require.
What else do you need to know about short term finance options?
When you need money to run your business, start your business, expand your business or take advantage of an opportunity, short term finance options provide you with the necessary cash flow. While you may notice this form of funding is more expensive, it’s often worth it when you’re able to take advantage of special prices or expansion opportunities. The benefit must outweigh the cost to the borrower for it to be a viable option.
Where can you apply for short term finance?
Lenders offer tailored short term finance options and with online application it is a fresh approach to lending. You can start by answering a few short questions on your financing needs online and move to complete an entire application. If formally approved, you’ll normally receive the money you need within days.
What You Need to Know About Short Term Finance
A part of doing business in the modern world is there often comes a need for short term finance. Most businesses typically need a quick solution to finance cash flow, expansion or other purposes. There are many things that you can use short term financing for and it can be an extremely useful financial option. It is a good idea to be familiar with these loans prior to applying.
What is short term business finance?
Short term finance is a general term for a short term loan solution specifically for business. It is a quick loan for an amount of funding and is usually repaid within 1 to 12 months. They are provided to businesses usually by non bank private financiers. This is because the banks often only provide longer term loans ie. 5 to 10 years and are usually slow in approval (they can take weeks).
Who uses short term finance?
The majority of people who use it are business owners, property developers, property investors, people who want to start a business or people who need bridging finance.
How to qualify for short term financing
Amongst other things, in order to qualify for most secured short term financing you will need equity in real estate or property (loans vary up to 65 to 75% of the property value). You also need a strong exit plan (as repayment is normally within 1 to 12 months). An exit plan is a plan for how you will pay back the loan at the end of the term. It can be through existing income, profits, or from another source like refinance or sale of the property.
Key Reasons to get short term financing:
- They can provide emergency funding.
- They can provide start up funding.
- They can help you make a large purchase.
- They can get you the money that you need quickly.
- They are flexible forms of funding.
WARNING – Do you really need a loan today?*
It can be expensive to borrow small amounts of money
and borrowing may not solve your money problems.
Check your options before you borrow:
- For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
- Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
- If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94
- This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.
The Government’s MoneySmart website shows you how small amount loans work and suggests other options that may help you.
funding Pty Ltd A.C.N. 607 035 861, Australian Credit Licence (#483665)
This guide provides consumers who are potential customers with details of our credit assistance or credit providing services. Please read this document carefully.
Note. This is not for any business related loans or finance. The credit guide only relates to any credit contracts under the National Consumer Credit Protection Act (“the Act”).
Where we merely provide the lender’s information, we are not providing credit assistance and therefore this guide is likely to not apply.
The terms “we”, “us”, “our” refers to the credit provider.
We provide consumer lending products such as:-
Our Obligations (under the National Consumer Credit Protection Act 2009 (s120 & 123 & generally)
To not provide credit to consumers that is unsuitable.
We will assess whether our credit contract is suitable or not based on the information you provide and information we verify.
The credit contract will be unsuitable if it is likely you will be unable to comply with your financial obligations under the contract, or could only comply with substantial hardship; or the contract does not meet your requirements or objectives.
This is a legal obligation we have.
Obtaining a copy of suitability assessment
You can request a copy of the credit assessment within 7 years of obtaining credit from us or prior to obtaining credit. If your request is within 2 years of obtaining credit we must provide the assessment within 7 working days. If your request is outside 2 years of obtaining credit we must provide the assessment within 21 working days.
Internal Dispute resolution
If you have a dispute, please contact us first.
We will endeavor to resolve the dispute with 7 days.
Should we not be able to resolve the dispute within 28 days we will notify you in writing.
External Dispute Resolution
If you are still unhappy with our decision or have an unresolved dispute you can contact the Credit Ombudsmen Service Limited (COSL).
Credit Ombudsmen Service Limited (COSL)
9am to 5pm, Mon to Fri
1800 138 422
Our fees and charges
The credit providers’ fees are outlined in the quote or formal loan offer. The credit assistance providers are paid brokerage fees or commissions on the loans introduced. Depending on the loan, product or lender this will either be paid by the lender or be payable by the consumer. You will be notified of any fees payable by you in the credit quote. These fees or commissions are typically between 1% and 3% of the loan amount.
You may obtain information from us regarding how fees and charges are payable are worked out, a reasonable estimate of commissions likely to be received and how they are worked out on request.
We may pay fees to call centre companies, real estate agents, accountants, or lawyers and others for referring you to us. These referral fees are generally small amounts in accordance with usual business practice. These are not fees payable by you. On request you can obtain a reasonable estimate of the amount of the fee and how it is worked out.
From time to time, we may also be paid referral fees, brokerage fees or commissions on the loans we introduce to other lenders. Depending on the loan, product or lender this will either be paid at a fixed fee for a lead or fixed percentage (ie. 1% of the credit amount) and paid to us in most cases by the lender. If any fees are payable by you, you will be notified of such fees payable in the credit quote.
Our credit providers
We specialise in providing credit assistance from credit provided from non-bank lenders. Most of our business is conducted with funding Pty Ltd or its credit representatives or associated groups.
Fees payable to third parties.
We may pay fees to call centre companies, real estate agents, accountants, or lawyers and others for referring you to us. These referral fees are generally small amounts in accordance with usual business practice. These are not fees payable by you. On request you can obtain a reasonable estimate of the amount of the fee and how it is worked out. From time to time, we may also remunerate other parties through payments, rewards or benefits.
We do not currently have any volume bonus arrangements.
funding Pty Ltd
C/- Level 3, 33 Elkhorn Avenue
SURFERS PARADISE QLD 4217