Finance companies provide much needed funds to Australian Businesses

Private finance companies have become an important lifeline for small and medium businesses in Australia. When banks and financial institutions have squeezed their credit lines, private funds have become competitive players in the industry. Since private funds mostly provide secured lending to businesses, their loan screening is less encumbrance. The rate of interest offered by private finance companies is also attractive and hovers around 1% to 1.5% per month. There are several other benefits of obtaining loans from private finance companies. Fast processing time, lower eligibility criterion and flexible terms and conditions are some of them. Loans can be taken for leasing and equipment finance, operational expenses or for business expansion. Loans can also be used for mergers and acquisitions. Most of the private finance companies have strong financial backing and raise funds on a continuous basis thereby maintaining a healthy loan book and adequate reserve funds.

 Finance Companies

Business owners have the option of negotiating friendly terms and conditions with finance companies because finance companies are not bound by internal red tape and operational procedures. They also are regulated by the Australian Securities and Investment Commission (ASIC). The credibility of the lender is also an important factor when dealing with a finance company especially when the loan is taken against a fixed asset. Online research can give valuable information about the loan provider. A finance broker can also provide information on whether a particular finance company is good to deal with. If further clarification is required, information can be sought by contacting them over the phone or email.

 

Finance companies provide loans to different types of businesses with minimal documents required. The advantage of this is that businesses which do not have fundamentally strong books of accounts can also apply for a loan. The loans can be taken for short to medium term period between 1-12 months. Very often borrowers pay off the loan as soon as their cash flow positions improve. It reduces the interest burden and helps the company to retain cash flow.  Professional finance companies are experienced advisors who can advise the best way to structure the loan. Once they understand the borrower’s requirement, they can suggest different mechanisms like one time loan or a line of credit facility that can be withdrawn as and when required.

 

Australian finance companies complement banks and financial institutions in offering credit to businesses and ensuring the vibrancy of the Australian SME industry. Business owners also find it convenient to deal with private finance companies because of their efficient and fast processes. If a business owner has a loan requirement, delaying the application process is not a great idea. Cash deficit is the single most common reason why many small and medium businesses fail. Timely infusion of funds gives the business owner much more control over operations and helps to improve business efficiency. Any funding requirement should be tackled immediately by either speaking with loan providers directly or a loan broker who can guide you through the entire transaction.