Fuel Your Business in 24 Hours

There are times when your business cash flow is not as good as it should be. There are also instances when you would need to invest more capital into your business to sustain growth or to further expand your business operations.

A business owner continuously seeks ways to improve business cash flow or look for ways to expand it sometimes comes to a point when a business owner needs to consider business loan funding to assist with either a cash injection or to fund their expansion plans.

There are so many ways to fuel your business, which takes a lot of time and effort. Planning ahead should be first and foremost. You must plan out your business strategy and operations for you to be able to have enough cash reserve and a good cash flow. Selling your assets, maintaining and improving a good accounts receivable balance, closely monitoring your liabilities such as account payables and purchases, monitoring your cash flow are some of the ways you can fuel and improve your business over time. But what if you encounter problems that may have been beyond your control or as simple as wanting to take advantage of a business opportunity which is too good to pass up.

It is especially important to address urgent business finance concerns with your finance manager so you can come up with ways to minimize losses and maximize all resources that are currently available to you. For urgent business finance requirements that would need additional capital, securing short term business loans can be one of the best option for you to consider.

There are short term business loans that are available from banks and lending institutions that could help keep with your business funding, especially during these trying times that we are experiencing a pandemic. Securing fast business loans may be the best way to go about fuelling your business without further stress on your business and to address your urgent business finance requirements and concerns.

Currently, traditional financial institutions have made it difficult for business owners to apply and secure these short term business loans because they require mountains of paperwork and financial information. Unlike banks private lenders such as Homesec Business Finance have made this process smooth and simple and with the minimal amount of documents required.

A number of these short term business loans for urgent business finance needs are available from Homesec. Homesec Business Finance can offer these fast business loans via their online application facility available 24/7. A decision may be made within minutes upon verification of submitted documents, and then funds will be available within twenty-four hours. Even businesses and business owners with bad credit score can now access these fast business loans because of the flexibility of the funding. Short term business loans have terms from one to twelve months depending on the agreement and the ability of the business owner to repay the loan.

At this point where there are current setbacks in the business setting all over the world brought about by the COVID-19 pandemic, a lot of business owners are faced with urgent business finance needs to solve problems in their operations. There are businesses that flourished and thrived so well pre-pandemic but others need funding solutions to help them thrive. The financial institutions such as Homesec are granting short term business loans to business owners which are helping them fuel their business to be able to bounce back from these setbacks. With Homesec’s fast-tracked application for urgent business loans and being able to make fast decisions on each application within minutes, it is indeed a good thing for business owners to have that kind of a facility for their urgent business finance requirements and concerns. Applying for fast business loans used to be a very time consuming process from banks and lending institutions. But nowadays, the whole application process for fast business loans has been made very simple and easy by Homesec, making it more convenient for business owners to use these short term business loans to improve or even save the life of their business.

First Mortgages: What You Need to Know

1st Mortgages are the most common type of mortgage offered by banks and private mortgage lenders. But before we get into all you need to know about first mortgages, it best to explain what a 1st mortgage actually is.

A mortgage is a legal instrument that gets placed on a land title in order to secure a debt against that property. The debt is therefore known as a mortgage.

If there are no other mortgages on the land title, the land title is known as being unencumbered. Which means there is no encumbrance on the land. Therefore there is no debt on the lend.

When a mortgage is applied to an unencumbered land title, that mortgage is then known as a 1st mortgage and has 1st ranking priority over that land, and remains until the debt is repaid.

However it is possible for the person who owns the property to get another mortgage against their land title. This additional mortgage is known as a 2nd mortgage as it sites behind the 1st mortgage. Therefore this means the 2nd mortgage has 2nd priority over the land.

So if the property gets sold, the 1st mortgagee gets its money first, and the 2nd mortgagee gets its money after that, so long as there is money left over.

This makes 2nd mortgages more expensive than 1st mortgages, due to the higher risk.

Why would someone need a 1st mortgage?

If you own a parcel of land, or a house or unit, and you need access to money, then you have two choices. Sell the real estate, or borrow against it. If you love the property and you don’t want to sell it, but you really need the money, a 1st mortgage is the perfect solution.

You simply get the money now, and pay it back over anywhere from 12 months to 30 years. Best of all, you still get the keep though property.

When you borrow money against your real estate assets, you are taking out a mortgage against the property.

This means if you don’t repay the loan when it is due, the mortgagee has the legal right to take possession of the property and sell it in order to get their money back.

So it’s important to seriously consider a few things…

Do I really need the money?
Can I afford to repay the money, with interest?
What happens if I lose my job or my business fails?

Whilst mortgages are great, you need to ensure you can live with the cost of the mortgage and the impact it has on your disposable income.

Many Business Owners will also use a 1st mortgage to access cash for their business. This is like using the equity in your home to make more money in your business. Its pretty clever when you think about it, however again, you have to seriously think it through.

The best part about a 1st mortgage for business purposes is that the costs of the 1st mortgage loans, as well as the interest are fully tax deductible.

However this tax deductibility does not apply to normal home loan mortgages on your principal place of residence. (i.e.: your primary home where you live)

How do I get a 1st Mortgage?

You can apply for a first mortgage from your bank or non-bank lender, or private business lender. The first thing the lender will do is order a property valuation. This is so the lender knows how much the property is truly worth. However at Homesec Business Finance we do not require formal valuations.

The next thing is how much the lender will lend to you, using your property as security. Lenders will use a calculation known as a Loan to Valuation Ratio, or LVR. If the lender says they will lend to an LVR of 75%, this means they will lend you 75% of the property’s value.

Many people wonder why a bank or private mortgage lender won’t lend the full property value. This is because the mortgage lender needs a buffer in case you default of the loan and they have to sell the property to recover their money.

When a mortgage lender sells a property, there is going to be legal costs and agents commissions. Plus the property has to be sold quickly by the mortgagee, so a sale known as a Mortgagee In Possession sale. So with all of these things taken into consideration, this is why the mortgage lender can often only lend to 75% of the property value.

Watch Out For lenders Mortgage Insurance (LMI)

This only applies to 1st mortgages funded by banks for consumer purposes. LMI is an insurance that is applied to a loan with an LVR greater than 80%. The ironic part about Lenders Mortgage Insurance is the borrower pays for it, but it’s the lender that the insurance protects.

Lenders Mortgage Insurance is simply there to protect the 1st Mortgagees money in the event of a mortgagee sale and property sells for less than the LVR they lent at. As mentioned, LMI only applies to high LVR loans.

If at all possible, it is better if you can save a larger deposit and keep your loan under 80% LVR. This helps you avoid LMI, which will save you tens of thousands of dollars. LMI is essentially dead money to you, as you don’t see any of the benefits from it.

Unlike the banks and commercial lending institutions, Private 1st Mortgages are generally only up to 75% LVR. So LMI doesn’t apply to Private 1st Mortgages.

Private 1st Mortgages are often funder much fastest than bank mortgages, and often with less paperwork and less hoops to jump through. You may get less options with a private mortgage, and they may be a little more expensive, but the speed and convenience is definitely a lot better than a bank mortgage.

With any finance product, make sure you do your research and get the 1st mortgage that is right for you.

5 Things Small Businesses Should Do When Applying For Loans

Loans for business can be a challenging prospect if you aren’t fully prepared, and if you haven’t researched your business loan options.

# 1

Loan Amount. Firstly, you need to establish how much money you need to borrow, and how you intend to use these funds in a way that will help or save your business. Loans for business are all about outcomes. You don’t borrow money for no reason, but it is important to plan your strategy first.

Too many business owners see something they need to borrow money for, but don’t do a Cost-Benefit Analysis first. You also need to look around your business to see if there is likely to be anything else you will need to borrow money for.

It is better to get all the money you need in one go, rather than going back to the lender at a later date for a business loan top-up.

# 2

Planning. Then you need to work out your preferred loan term. The shorter the loan term, the higher the loan repayments. The repayments need to match your budget and your cashflow. Put simply, the loan for your business must be affordable.

There are some great business loan calculators online which will assist you in planning what your business loan repayments will look like.

# 3

Apply for the Right Loan for Your Business. This is very important as too many business owners tend to just apply for whatever loan for business, they think will get them the money at the cheapest rate. There are two problems with this. Firstly, you may not qualify for the business loan type you are applying for. This just leads to your time being wasted and another hit on your credit file.

Secondly, some business loans are very restrictive, and come with very short terms. Yes, you may be able to afford it, but it puts a lot of stress on your cashflow.

On the other hand, you may be applying for a business loan with a much longer term, but the cost over time does not represent the best value for money.

Shop around and do your research when looking for loans for business. There are so many options these days, and most don’t involve having to go to a bank.

Now you can choose from unsecured business loans, equipment finance, private 1st mortgages, private 2nd mortgages, business caveat loans, short term bridging loans, invoice financing, sale and lease back options on equipment.

Most of these business loan options aren’t available from your bank and are often very easy to get approved for. To add to the good news, most of these business loan options can also be funded in 1 to 2 days, and the secured business loan options require almost no paperwork.

Your credit history is also a big factor on which type of business loan you will be successful in obtaining. Some loans for business require a high credit score. Whereas some of the secured business loan options will lend to business owners with a much lower credit score, because they have the real estate security to fall back on.

# 4

Talk to Your Accountant. Loans for business are fully tax deductible, so it is important you give a copy of the loan contracts to your accountant at tax time so the costs of the loan, can be used to reduce your tax bill.

If you have bought an asset with the money you borrowed, make sure you have those details ready for your accountant so the item can be depreciated or written off. This also reduces your tax bill.

Some larger loans for business require tax returns to be completed for the previous financial year, so if you are seeking a larger loan amount, you should arrange to get all of your tax returns fully up to date. This also includes your own personal tax returns.

If you have an overdue tax bill, this is close off many business finance options. However, don’t despair. There are still options available to you if you have sufficient equity in real estate security. These options are the secured loans for business, such as 1st and 2nd mortgages, caveat loans, and business bridging loans.

Depending on the lender, most of these loans don’t require up to date tax returns, and are generally very light on paperwork. However, you do need to be able to offer real estate security.

If you do have an overdue tax debt, you may need to get this paid before you can qualify for some loans for business, such as equipment finance. So, what do you do if you don’t have the money to pay that tax debt?

That’s a common problem and it is often a “catch 22” that stops a lot of businesses from obtaining business finance. However there is a little known solution, and they are secured business loans. As mentioned before, these loans are also known as caveat loans, private 1st mortgages and 2nd mortgages. These privately funded secured business loans are often the quick solution to getting the tax debt paid and out of the way. The sooner it is cleared up, the better. This is for a lot of reasons, not least the fact that the Tax Office could foreclose on you of the debt isn’t paid.

# 5

Be Ready. Have everything ready to go for when your business loan is funded. Don’t get caught holding the money in your bank account and paying interest on that money unnecessarily. Be prepared and have everything ready to go for when the funds from your new business loan are ready to be advanced.

So, look at your current personal and business situation, and then look around at the variety of business loan options. Remember that the cheapest interest rate isn’t always the best path to take. You need to find the business loan that it perfect for your needs and for your current circumstances.

Introducing New Zealand’s Fastest Business Loans

Ever needed to find a business lender who can genuinely fund a sizeable business loan BY TOMORROW?

Been looking for a business lender who doesn’t need piles of paperwork, financials, cashflow records, and who is not sensitive about credit scores?

Maybe it’s to save the business from disaster, or take advantage of a major opportunity.

Or maybe it’s for a property purchase and the finance has fallen over, or the bank won’t be ready in time for settlement?

Even with the best planning, these situations occur quite a lot, and without notice.

The next question is….

What do you do?

Well we have some great news. HomeSec Business Finance has been funding small businesses and property* buyers across Australia since 2004, and they are now funding right across New Zealand.

What we do

We fund short term business loans from 20k to 500k in 24 hours.

Loan term from 1 – 6 months
Interest is capitalised for the loan term (as there are no payments during the term)
No cashflow records or financials required
We don’t do valuations
Poor payment history and loan arrears are Ok
Funds available in 24 hours from the time you apply, in most cases

LEARN MORE

SEE IF YOU QUALIFY

We hope this may solve a problem for you. If you think it could, and you want more information, please email or give us a call. Or click See if You Qualify.

PS: Want to help other businesses? Join hundreds of Mortgage Brokers, Accountants Lawyers, Business Coaches and Real Estate Agents who are now offering this unique and often vital finance solution to their business clients. If you are one of these industry professionals, come on board in less than 2 minutes.

*As our loans are all ‘non-coded’, loan applications must be for a business or commercial investment purpose. Property purchases need to be either commercial properties or residential properties being purchased in a company name.