In the changing world of commercial finance, sometimes the traditional way of doing things just isn’t enough. When dealing with money and loan requests, businesses are always on the lookout for the deal that will best suit them and their needs. However, there are many times when conventional banking solutions aren’t flexible enough to address the intricate nuances and precise demands of clients truly.
In these cases, there are other solutions, usually called flexible financing terms, that give companies more power to do what works for them. These alternatives include private lenders, non-bank institutions and peer to peer lending. Acumen finance, with over 85 years of combined experience in the commercial mortgage and financial industry, is the perfect company to help you with your business commercial finance and funding needs when you require more than just the usual banking options.
Private lenders are a good alternative for those who are having difficulty securing a loan from a traditional banking institution. In the past few years, banks have begun to operate on more conservative terms, that can put business owners in a tough position. However, private lenders open up a range of new options due to their flexibility and having a quicker turn-around time. Although private lending can often have higher interest rates, the approval process is usually much faster, allowing you to close deals and grow your business quickly.
There are several types of private lending which, beyond the stock standard commercial lending options, include second mortgage lending, caveat lending, and mezzanine lending. Second mortgage lending is one of the most common lending solutions and consists of securing further financing against already mortgaged property. One of the most accessible private lending options is the caveat loan. These loans are official notes on property titles that provide the borrower with money, while the lender receives an equitable interest in the collateralised property. And for those who need short period cash infusions, mezzanine lending is a great option. Mezzanine loans are very flexible and do not usually require lender due diligence and collateral. These loans are ideal for people who might not have strong relationships with other lenders. They are often structured similarly to interest-only loans and have tax-deductible interest payments.
In all private lending situations, it is essential to find a broker who can match you with a lender based on the guidelines in your proposals. Additionally, it is crucial to make sure that there is proper documentation of all details to ensure that the arrangement created will be upheld in the future.
Non-bank institutions are another excellent alternative, but unfortunately, there are many myths, and mistruths are circulating about what it means to use a non-bank lender. Many people believe that non-bank lenders are less trust-worthy they only help those with bad credit they are expensive, or that they are not financially secure. However, those assumptions, more often than not, are inaccurate. As with any financial decision, due diligence must be taken to ensure that you craft a secure deal. Non-bank lenders often provide businesses with a wide range of finance options and are willing to work with borrowers in similar ways to banks. They take into account your specific circumstances and create an agreement that is satisfactory for all involved. Most lenders must also comply with the consumer credit rules and regulations that banks have, offering you protection.
Acumen’s online platform, with its aggregation of non-bank and commercial property lenders, gives you secure access to the non-bank lending market. These services provide businesses with all of their commercial options to help them get to attain a loan from very responsive and fast-moving lenders.
Peer to Peer (P2P) Lending
Peer to peer lending is relatively new in Australia, but it is another fast and flexible option. P2P lending allows borrowers to get loans directly from other individuals, and it cuts out the dependency on formal financial institutions. Sometimes called “social lending” or “crowdlending.” P2P loans tend to offer standout rates, low fees, and quick access to funds. However, as a newer option on the lending market, there are still a lot of, mostly unwarranted fears about the risks associated.
Many of the new P2P lending platforms are designed to make it easier to borrow money because they handle the
paperwork legal documentation, and perform background/credit checks to ensure that the borrowing and lending relationship remain amicable. And although not regulated by APRA(Australian Prudential Regulation Authority), they are required to be licensed by the Australian Financial Services(AFS). They are kept in check by the ASIC (Australian Securities and Investments Commission).
As a partner investor, Acumen Finance has multiple options to help clients with Commercial Lending in Australia. When traditional financing means don’t work for you or your business model, there are always other faster, flexible means to secure loans and keep your business on the right track. If you want to free yourself from the restrictive rules of a traditional bank and work with a customer-focused broker, contact Acumen Finance. With the power of fintech and novel banking solutions continuing to grow, people should no longer feel confined to traditional banking methods, particularly when there is a whole new world of flexible options out there.