A good deal depends on a good broker

Getting a loan for buying a business or funding growth of your business is getting harder day by day, with banks tightening their criteria for business lending during last few months.

Data obtained from the Reserve Bank of New Zealand revealed that total loans to New Zealand businesses contracted in August for the eighth month in a row and were down compared to the corresponding period last year.

This decline was the first in the past six years.

Under such a scenario, an experienced mortgage broker with good in-depth understanding of business and commercial lending can help in arranging appropriate loan for your business needs. 

Knowledge of constantly changing requirements of banks to approve your loan application is very crucial. Different banks have preferred industry categories and a prudent broker moves the application where he or she gets the best deal for your business. 

Preparing your loan application and ensuring that it fits the lending criteria of banks are important at the outset. If banks still have any issues, an experienced and qualified broker should be able to address them, through lending expertise and close relationship with them.

Whether you are starting a new business or growing your existing business, discuss with a good broker who can understand your needs and can advice as to the type and amount of finance they can arrange for you.

A broker should have good understanding of business lending in-depth and be capable of providing solutions appropriate to your needs. A broker who has good working relationship with banks would get the best deal, after comparing available lending schemes and criteria.

An appropriate lending structure for your business can make all the difference.

Funding Growth

A good broker can identify as to what is needed to take your business to the next level.

Based on your situation and goals, a broker would negotiate appropriate lending solutions with banks. There are solutions for all business needs, ranging from overdrafts to meet unforeseen contingencies, purchase of machinery and equipment and buying stocks.

Once you have identified the business you are interested in purchasing or starting, you should contact a good broker with all the relevant documents, including balance sheet and profit and loss account.

The broker will be able to analyse the situation including your financial position, cash and equity available with you, your background, the current lending policy of the banks and advise you the best finance option available.

Banks look at the type of business, its cash flow, management system, past performance of business, your experience and capability to operate and other factors.

The fixed assets and goodwill of the business will undoubtedly count towards banks’ comfort level. Your overall financial position will also influence the bank’s lending decision.

Suresh Sharma is director of Cherry Mortgage Solutions based in Auckland. He has previously held managerial positions at large commercial banks in UK and New Zealand. He can be contacted on  021-827575. Email: cherrymortgage@xtra.co.nz  Website: www.cherrymortgage.co.nz.

A Personal Disclosure Statement is available on request.

Disclaimer: The above article should be taken only as a guideline and not as personal advice. Mr Sharma absolves himself of all responsibilities or liabilities in this connection.