Being a small business owner is not for the faint hearted. You wear many hats and carry all the stresses of running the business.
As loans facilitators we continually see and question how serious small business is about making their business work for the long term. Lets face it as a small business owner you are almost on the job 24/7 how can you not be when so much rides on your business success? However, there are times when it has to be questioned do you love what you are doing? If you don’t you really should not be a business owner.
To be a business owner you need passion first and foremost. You need to know and understand the pitfalls and when to take the helping hands when they are there.
When it comes to money business has never had it so good. There are a lot of lending options that are no where near as restrictive as borrowing in the housing market. This makes it easier for business to get funding when they need it depending on their situation.
Unfortunately there are some business owners that do not have the passion and that is very sad because when there is no passion the business suffers, it makes it hard for them to stay viable or sell the business. If they have employees it means there is a flow on effect that goes beyond the business itself.
We recently had a business owner come to us with a problem whereby the bank was calling in their business loan secured against their resort style business/property, they had until the end of May 2015 to come up with the money. The situation was tenuous from the start however as the 4 months of working on this loan for the client it became evident they had not told us the full story and inferred they should be handed a $1m loan without fully declaring their position as was requested by the potential lender.
Due to the geographic location of their business/property it was tough to find a lender that would even consider them for a loan as there were a number of similar properties in the area for sale and had been for quite a long time making them a high lending risk. We spent a full day ringing every business lender and private lender in the country and only found 1 private financier that would consider the clients situation.
When we asked for final documentation to submit to the lender for assessement the borrower just stopped contacting us. When we did catch up with them they had all sorts of reasons why they had not attended to this request.
It is hard to know if they realised the gravity of their situation and that we were handing them an opportunity to pay out the bank and settle their affairs fast so we could refinance for a longer term. It would have saved them a great deal of stress.
We are now in June 2015 and as evidenced by copies of documentation the client sent to us the bank will be foreclosing on them. It is a shame, their situation could have been avoided.
The above example is pretty extreme but the premise of it is not unusual. Whilst business finance is easier to get than a home loan the business owner still needs to provide information to the lender about their business and current situation. Business owners who are serious about their business will always be very forthcoming, those who are struggling for all types of reasons are likely to have become jaded and lost their passion. In these circumstances it is very difficult to give business a life line.
Katherine Quirke is passionate about assisting business owners grow through finance options that are tailored to their situation and needs. Call Katherine on 1300 125 226 to discuss your options or visit: Business Loans Shop