Business Loans FAQs

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How much deposit do I need to purchase a business?

This depends on the type of business and its trading history. For a well-established business, you may need up to 50% deposit. For most other types of small business, you will need to use the equity in your home to support the business proposal.

Why do Banks ask for unlimited Guarantees when seeking bank finance?

If you operate a business as a company, a guarantee from directors is required. A company is a separate legal entity so banks need to connect you as a director to the business. In case of business failure, they can recover money from you.

Can I get a loan from the bank for business if I don’t own a home?

Yes, if the business has strong trading results and for well-established business.

Banks need to have a second way out if the business fails, so a lending proposal supported with equity in a home is more likely to be approved.

My House property is owned by my family trust. Can I still borrow for my business?

Yes. Banks take a guarantee from the trust in favour of the business

I approached the bank for business finance and they asked me to get a cash flow forecast. They hold my house as security, why do they need this?

For new business, a cash flow forecast and a business plan is required. Lenders need to determine the viability of the business and understand where future revenue will come from to meet liabilities. The business must demonstrate it is able to pay its financial commitments.

Banks have no intention of selling your house property to recover the business debts

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