Reviewing your business finance is just as important as your home loan

The media have focused a lot of attention in recent years ‘educating’ the public that they should regularly review their finances including the terms of the mortgage over the family home. While the family home may be the biggest investment many of us will make, business owners can also invest significant capital in their operations often funded (at least in part) by some form of debt.

The guidance or good practice to regularly review your lending arrangements applies equally to business lending, or some would argue ‘more so’ given debt levels can be much higher than the average home loan.

While Banks conduct annual reviews of their loans with clients, this focuses on being satisfied that the loan repayments can continue to be met and their security position remains satisfactory. This will not necessarily assist the borrower understanding if there are alternate solutions that may better meet their needs.

Our Commercial Finance Brokers are well placed to review options available in the market across a range of lenders. This can include purely refinancing and does not necessarily mean you need to be borrowing additional funds.

We have seen many challenges for businesses over the last two years often having to change or ‘pivot’ to survive in the face of COVID inspired lock downs, staff shortages and unprecedented delays in supply chains. Government stimulus in the form of JobKeeper, loan deferrals, subsidised loans and  boost payments have also been a factor over this period adding much needed cashflow to assist meeting commitments.

Consequently, the drivers of businesses have altered, which can make managing financial affairs difficult as the changes in conditions take time to reflect in trading figures even though loan commitments may have been kept up to date throughout this period. This can cause business owners to put off reviewing their finances until they have a ‘good set of figures’ to show a prospective lender and therefore delaying implementation of an improved borrowing structure that adds benefit to profit and cashflow.

Having a trusted Commercial Finance Broker working with your business has never been more important.  They can review your circumstances and help navigate the myriad of lender policies and options on offer, which can include:

• Refinance assessment based on account conduct
• Refinance or ‘switching’ costs (e.g. valuation) met by the lender
• Assessment of debt servicing based on rent income alone and / or limited financial information.

Knowledge is power, so start the conversation today and let us help you understand what your options may be.