All Topics / Finance / small business loan max. lvr

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  • Profile photo of luke24luke24
    Member
    @luke24
    Join Date: 2004
    Post Count: 6
    June 7, 2004 - 3:38 am

    I am looking to purchase an existing business $250,000 to $300,000 and wish to know what is the max. lvr to borrow funds. I have a cash deposit and want the loan to be unsecured. Ideally I want to put in the least amount of cash as possible.

    Does anyone have access to lenders for unsecured business loans?

    Thanks

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,436
    June 7, 2004 - 4:05 am

    Luke

    unsecurred business loans are very hard to find. If you look at all the loans offered by banks etc, you will see they want to secure the loans on a property.

    I beleive you can get loans on some larger franchises.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Nat RNat R
    Member
    @nat-r
    Join Date: 2004
    Post Count: 224
    June 7, 2004 - 6:09 am

    I agree …the banks will assign little or no value to the business and typically lend only agianst any property you have or that comes with the business.

    Profile photo of AdministratorAdministrator
    Keymaster
    @piadmin
    Join Date: 2013
    Post Count: 3,225
    June 7, 2004 - 1:30 pm

    One obstacle is that (likely) part of the purchase price represents equipment.

    If things don’t quite work out and it were to come to the point that the lender walks in and takes over the equipment will finish up being sold at firesale prices well below its bookvalue.

    So it isn’t therefore so unreasonable that lenders look for something a bit more solid (like briks and mortar ?).

    However, having said that, if the equipment isn’t all that old then you may possibly be able to
    obtain some leasing finance.

    Alternatively, is it possible for any present lease arrangements to be taken over by you ?

    Have you tried to see whether the vendor is interested in leaving some money in (to be repaid over a period ?).

    If you care to provide some more details to me via a PM or an email I would be happy to see what exactly are the possibilities as far as bank finance is concerned.

    However, as Terry already has pointed out most such finance is secured by supplying some property security.

    Pisces

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