Divorce can be one of the more challenging experiences we can go through and it is also a driver for the need to refinance loans.
The same is true of business breakups.
A clean, fast break can be best for everyone and absolutely the best for business.
Why is funding a partner buyout challenging?
A Partnership can fall apart for a number of reasons and, whilst some partings can be amicable; a speedy solution that allows you to get on with business again can make the world of difference.
However, lending requirements at major banks can make this easier said than done.
There can be a range of challenges business owners face:
- What do you do if financials aren’t up to date?
- Maybe you have tax debt.
- Maybe your major bank isn’t supportive of funding your partner buyout for other reasons.
- Maybe your bank would just like their loans paid out and your problem not to be their problem.
- Maybe you need to restructure your business and the new entity doesn’t have any trade history that supports getting a loan.
How do you overcome these issues to successfully get funded?
The simple answer to this is outside of the major bank network.
For smaller amounts there are unsecured options that can be approved and funded within 24 hours.
For loan amounts of more than $250,000 there are lenders who will support you in these circumstances even if you have tax debt or your financials are not up to date.
A solution, secured by property (or multiple properties), can be achieved with a loan to value ratio of up to 70%.
If there’s no debt against the security, some lenders can fund a solution within a few days.
It’s even possible to have no repayments for up to 12 months if you have enough equity.
(Read about 3 ways to get business lending fast here).
What if you want to go back to your normal bank?
This isn’t a forever solution – it’s a strategy to get you through a challenging time.
Whilst the downside of banks is they want customers without challenges, their upside is they offer the lowest rates to those that fit their model.
For that reason, once trading data is available for the new entity we can then look to refinance the loan back to a tier 1 lender and seek the most cost effective solution when it’s an option again.
Have a great week.
Lending we are doing right now
$495k term loan with repayments deferred for 9 months.
$1.8M low doc loan for a partner buyout with no financials required
$65k unsecured line of credit for a residential builder
$125k unsecured line of credit for a commercial construction business
$80k unsecured term loan for a business owner payout