Commercial Loans – Sunil Prakash

Commercial Loans

What to know

Business lending is usually a bit tougher as banks need to understand the viability of your business. This is important as business failures are very common in New Zealand.

It is therefore essential you do proper market research for the product or service you are offering.

We’ll discuss any fees and costs involved in providing this service to you.

Talk to us and we will help find a solution for you.

We have produced great Kiwi Business success stories such as Trade me, Michael Hill Jeweller and Mike Pero Mortgages.

Please read this as a guide to assist you with your business purchase

Please seek your own legal, taxation and financial advice

1. Important considerations

– Location, location, location- This is key if you are relying on foot traffic.
– Understand who your competitors are.
– What is unique about your business product or service?
– How do customers find you?
– Rental or leasing costs.

2. Documents you need to put together for a loan proposal:

– Banks generally require 2 years financials for established businesses,
– A cash flow forecast- your accountant will put this together for you,
– A Business Plan,
– Business lending is usually riskier so banks need something to fall back on such as security – Existing house property with equity will be useful.
– Your financial contribution towards business purchase- Lenders usually ask for at – least 50% contribution- Existing equity in a house property may assist.

3. Common causes for business failures

– Not consulting business advisers such as accountant/ solicitors
– Technological changes
– Lack of or no working capital
– Poor management or no management experience
– Excessive operating costs such as business rental

4. Useful Links

Business Government NZ