With over ten years with ANZ business and corporate banking, Jon Colley has the experience you need to ensure that if you are buying or refinancing a business, require additional working capital, purchasing a commercial property or wanting to discuss some of the numerous other finance options including Debtor or Stock Finance, he will be able to provide the answers for you.
Jon was with ANZ Corporate Banking from 1998 to 2003, and specialised in commercial loans for businesses with more than $20m in turnover or $2m in lending. That is not to say that he does not understand smaller business either, having started in the ANZ as a small business specialist.
Jon can also assist with any SMSF borrowings you are considering, and this can be a fantastic option for those seeking to purchase their own business premises and stop paying rent.
Property Development funding is another area that Jon has had experience with as well, and while the Banks have made their policies more difficult since the GFC, there is a range of lenders out there that will consider these proposals on more favorable terms than the banks are currently offering.
Our experience and access to a wide range of lenders means we can provide finance for both the usual and unusual needs of a business customer.
Types of Business Loans
Business finance is borrowings used specifically for the operation or acquisition of a business. Business Loans are usually secured by a residential or commercial property, however, in certain circumstances the lenders are willing to consider borrowings against the business value (on acquisition and refinance/restructure) depending on the cash flow of the business (often referred to as cash flow or unsecured lending).
These business loans are for business purposes only and the cost associated with these loans are generally tax deductible.
Many established businesses can be funded against the business value up to approx 50% of the purchase price, excluding stock. This is dependent on many factors such as how long the business has been operating, the income from the business, and the business experience of the new business owners. Security of tenure (or the length of the lease on your premises and/or license agreement in the case of franchises) is also a very important factor for consideration, and the bank will also consider the impact of this.
Overdraft (Lines of Credit)
This is where a lender gives you a limit of how much you can borrow, generally for Working capital requirements. You can draw down as little or as much as you need up to that limit for business purposes, and although there is a line fee to have this facility in place, the interest charges are only incurred on the portion that you actually use.
Start-Ups vs. Existing Businesses
A good point to consider when seeking business loans for your own business, is that lenders usually consider established businesses less risky than a start-up venture. Speak to your finance broker as they will be able to assess how the bank will see your proposal.
Franchise funding is exactly what the name suggests; it is where lenders fund people who are opening a franchise. Lenders are likely to franchise finance because they have proven that their business model works as opposed to new start-up businesses. In some cases, if a franchise is on a lenders preferred franchise list, you may be able to borrow up to 65% of the franchise value.
Management Rights Finance
Management Rights are a very popular business type in Queensland and lenders provide favorable lending options for prospective purchasers of this type of business. The parameters for this type of finance is heavily dependent on the specific details and location of the resort, management experience of the prospective purchasers and the overall profitability of the business.
Debtor/ Invoice Finance
With this finance the lenders gives you a percentage, in cash, of what is owed to the business (usually between 80-90%). The amount depends significantly on the age and quality of the Debtors. Debtor Financing can be a great way to obtain more working capital to grow your business without the need to contribute more property security.
If the business has bought stock from overseas, it can be some time before the finished goods are sold. With trade finance, the lender gives a percentage of the money against the stock that has been purchased.
Self Managed Super Funds (SMSF) Loans
Lenders are now offering business loans against SMSF for investment purposes. Three parties – accountant, financial planner and lender – need to be involved when arranging finance of this nature.