Below are the answers to common questions that we get asked on a regular basis.

General FAQs

What Is The Role Of A Lender?

A lender is a business or financial institution that extends credit to companies and individuals, with the expectation that the full amount of the loan will be repaid. Lenders require borrowers to pay interest, which is charged on a certain percentage of the total amount of loan extended to the borrower.Before a borrower enters and applies for a loan, a lender must make reasonable enquiries so that they are satisfied that the contract will likely meet your needs and that you will be able to make your repayments without suffering substantial hardship.

Our lenders here at Greenline Home Loans will help you reach informed decisions, ensuring that you are pleased with various products that match your requirements.

What Is Required by a Lender When Applying For a Loan?

There are five common requirements that lenders look at when assessing loan applications.

1. Credit Score and History

An individual’s credit score is one of the most crucial factors that lenders consider when evaluating a loan application. Credit scores are based on one’s payment history, amount of outstanding debt and length of their credit history. Many lenders require loan applicants to have a minimum credit score, although, some lenders will lend to applicants without a credit score at all.

2. Income

Lenders appoint income requirements on borrowers to ensure that they have the ability to repay a loan. You may be required to provide evidence of your income in the form of bank statements, payslips and recent tax returns.

3. Debt-to-income Ratio

The debt-to-income ratio represents a portion of a borrower’s gross monthly income that goes towards their monthly debt service. Lenders use this ratio to forecast a prospective borrower’s ability to make payments on new and current debt.

4. Collateral

If you are intending to apply for a secured personal loan, your lender will make it necessary for you to guarantee assets as collateral. Secured personal loans can be collateralized by assets such as investment accounts, real estate or cash accounts. If you fall behind on payments, your lender can repossess the collateral to regain the remainder of the loan balance.

5. Origination Fee

Many lenders require borrowers to pay personal loan origination fees to cover the costs of processing applications, running credit checks and closing.

Is It Better to go to a Lender and Mortgage Broker Near Me or go Directly to a Bank?

Getting your loan from a lender or going directly to a bank ultimately depends on your personal preference. You may feel that a lender is a more convenient option for you as they will have more knowledge of the various loans available and may be able to suggest the one most suited to your situation. Lenders can also negotiate interest rates and other terms directly on your behalf. Also, in most cases, you will pay less to utilise the services of a lender rather than going directly to the bank.

What is a Home Loan Pre-Approval?

A pre-approval is where your lender gives you conditional approval to borrow money for your ideal property before you have even found it. At this stage, nothing is final, and the lender still has the ability to decline your final loan application.

A home loan pre-approval provides you with a precise amount that you can afford to spend on your future property. This is very helpful as it acts as a guide, narrows your search, and avoids wasting time searching for homes that are way beyond your budget.

Greenline Home Loans can help you with your home loan pre-approval. Get in contact with us today!

What is the Difference Between Fixed and Variable Rate Loans?

A variable rate loan is a loan that has interest rates that may change from time to time. Typically, the rate movements correlate with the Reserve Bank Australia (RBA) rate announcements, however, the change might not be the full rate cut or rate increase.

A fixed-rate loan is a loan that has an applicable interest rate that is determined at the time the loan is fixed and remains applicable for the term of the fixed-rate loan. Fixed-rate terms tend to vary between 1 and 5 years, and the fixed-rate offered may vary between the different loan terms, as it relates to the lender’s expectations for the RBA rate movements over the coming years.

Generally, the variable rate loans may offer more features, such as an offset account or a redraw facility and may allow for additional repayments, while fixed-rate loans tend to be less flexible and offer fewer features.

Clients can choose to split their loans and hold a portion of their lending as fixed-rate loans and a portion as a variable-rate loan. This enables you to benefit from both worlds.

To find out what is the optimal solution for your needs, speak to one of our experts at Greenline Home Loan today!

What is an ‘Offset Account’?

An offset account is a simple transaction account that enables you to utilise your surplus cash in order to offset against the interest applicable to your loan.

For example, if your home loan balance was $500,000 and you have $10,000 in your offset account, you would only be paying interest on $490,000. The cash sitting in your offset account is always available to you as it is not paid into the loan. As interest is calculated daily by the lenders, your offset account is a great place to have your salary paid into.

What is an ‘Interest-Only’ Loan?

An Interest-Only Loan, as the name entails, is a loan where the borrower is only required to repay the interest on the loan, making the monthly repayments lower as you are not required to add the principal portion of the repayment. This, in turn, means your loan amount is not reduced over time.

Interest-Only loans are typically sought after by investors who are looking to manage their cash flows on investment properties, as well as to maintain their loan balance for taxation reasons.

Lenders tend to offer Interest-Only terms for no more than 5 years, with the expectation that the loan will revert principal and interest repayments over the following 25 years of the loan.

Another important consideration for borrowers is that Interest-Only loans tend to attract higher interest rates than loans with principal and interest repayments. So, the decision on which loan type to proceed with must take several variables into consideration.

What is Negative Gearing?

Negative gearing is a term that applies to property investors. A negative gearing position happens when your property-related annual expenses are higher than your annual rental income. Accordingly, if your annual rental income is higher than your expenses, your position is referred to as ‘positively geared’.

The benefits of negative gearing are often related to taxation considerations, while the benefits of positive gearing often relate to cash flow management.

If you are considering an investment property purchase and would like to discuss the various gearing strategies applicable to you, contact us today!

What is Lenders Mortgage Insurance?

Lenders Mortgage Insurance (LMI) applies to lending exceeding 80% of the property value, based on the lender's property valuation. This cost relates to the increased risk taken by the lender when providing their loan. LMI can sometimes be capitalised into the loan, which means you do not need access to capital to afford this loan. At times, some lenders may waive this cost to certain professionals such as accountants, lawyers or engineers.

To find out what the LMI costs are associated with your potential purchase, contact Greenline Home Loans today!

What is a ‘Comparison Rate’?

Ever seen a “Comparison Rate” listed right next to the advertised rate? Have you stopped to ask yourself what that rate is?

The comparison rate is the applicable rate calculated considering all fees and charges applicable to the loan. The comparison rate is then calculated based on a loan of $150,000 and a loan term of 25 years.

When taking out a loan, you are advised to make sure you understand what all the fees and charges are applicable to the loan and understand the benefits of the loan features offered relating to the applicable fee.

Talk to us today so that our Greenline Home Loan specialists can find the optimal solution for you!

What’s The Difference Between A Mortgage Broker And A Mortgage Lender?

Mortgage brokers do not lend money to borrowers. The role of a broker is to help borrowers find the best lenders according to their circumstances. They work with many lenders and act as the middleman or matchmaker.

On the other hand, a mortgage lender provides mortgages - loans in which you use to purchase a property. Borrowers repay this money over time. You will need to obtain quotes from multiple lenders to explore all your borrowing options.

How Can I Apply for a Loan to Consolidate My Credit Cards or Personal Loan?

When applying for a loan, often you might be able to apply for additional borrowing in order to consolidate your credit card debt or personal loans. This can help you significantly reduce the interest rate applicable to your current debt and repay your debt much faster, saving you on interest charges.

Those who have an existing mortgage loan can consider a mortgage refinance and cash out strategy to help them consolidate debt.

To find out if you can save on interest and repay your debt quicker, contact Greenline Home Loans today!

Home Loan FAQs

How Can I Use Equity in My Home to Support Me in Purchasing an Investment Property?

There are different strategies available to help you utilise the equity that has built in your home in order to help fund an investment property purchase. Provided that there is enough equity in your home, you can consider a loan refinance and a cash out strategy which can be used as a deposit for your next property purchase, or even consider cross collateralisation of your home.

To find the most appropriate strategy which may apply to your specific circumstances, contact us today!

What is the Difference Between an ‘Owner-Occupier Home Loan’ and an ‘Investment Loan’?

An owner-occupier loan is designed to provide finance for those looking to purchase their home. An investment loan is designed to provide finance for those looking to purchase an investment property.

While both loans are backed by property as a security, the lenders tend to view the investment loan as a higher risk lending and as a result the applicable interest rates tend to be a bit higher.

What Kind of Repayments Should I Choose - Weekly, Fortnightly, Or Monthly?

As interest is calculated daily by the lenders, as a rule of thumb it is beneficial to make weekly repayments or fortnightly repayments over monthly repayment. However, cash flow is always a consideration as most people are dependent on their salary to meet their loan repayments.

With that said, the offset account structure can provide you with a loan structure that provides you with the same benefits as weekly repayments, while structuring your loan on monthly repayments.

To find out how to best structure your home loan to enable accelerated repayments and reduce interest on your loan repayments, contact us today!

What is the Difference Between a Home Loan and a Mortgage?

The term ‘home loan’ refers to the money that an individual borrows from the bank in order to purchase a property. On the other hand, the term ‘mortgage’ refers to an agreement between a borrower and a lender, in which a property is used as security for a loan.

Mortgages exist to protect lenders from default. If the borrower falls behind in their home loan repayments, their lender has the right and obligation to sell the property on which the loan is secured in order to recover the balance of the loan.

Why Should I Refinance My Home Loan?

In the chance that you have had your current home loan for multiple years, it is very likely that your needs and circumstances have changed, or that your loan may not have had flexible features that have since become available.

There are a number of reasons as to why you should refinance your home loan, such as:

  • To consolidate your debts so that it is easier to manage your finances
  • To get a more suitable interest rate, or new features such as flexible repayments or an offset account
  • To access funds to finance a long overdue holiday or investment opportunity
  • To release equity from your property to carry out renovations to your current existing home

Is a Guarantor Required for a Home Loan?

Requiring a guarantor for your home loan depends on the overall strength of your financial position. You will need to take your income, expenses, assets, liabilities, and size of your deposit all into consideration. A guarantor provides added security to the lender, although a guarantor should be aware of the personal risk should you default on loan repayments, they will be held liable to pay back the amount owed to the lender.

Speak to our professionals here at Greenline Home Loans to find out if a guarantor is best suited to your circumstances.

What Documents Do I Need for a Home Loan?

When applying for a home loan you will need the following documents:

  • Identification - driver’s licence, passport or photo ID
  • Proof of income - payslips, bank statements, income verification from your employer
  • Financial assets, liabilities and expenses - list of your expenditure and savings, outstanding loans or debts, and assets

How Much Should I Borrow for a Home Loan?

To figure out how much you should borrow for a home loan you should consider borrowing an amount that you are comfortable enough to repay. You should also take into account the upfront and ongoing costs such as stamp duty, moving expenses and legal fees. Other factors include how much the lender is willing to lend you, your personal circumstances and your financial goals over short term and long term periods. It is also worth taking into consideration that if you plan on borrowing more than 80 per cent of the total value of your home loan, you will be required to pay lenders mortgage insurance.

Find out how much you can afford to borrow using our Loan Repayment Calculator or get in contact with one of our lenders who will be able to guide you through this process.

What is LMI?

LMI refers to Lenders Mortgage Insurance. LMI is insurance taken out by a lender that offers the lender protection in the case that the borrower is not able to repay the loan. Lenders Mortgage Insurance is usually required for loans with a loan to value ratio greater than 80 per cent. It is the borrowers that cover the cost of Lenders Mortgage Insurance.

How Much Deposit Do I Need for a Home Loan?

For a home loan you are required to supply a minimum of five per cent of the property’s value for your deposit. However, this will vary between lenders. It is important to note that you will have to factor in the minimum deposit amount on top of costs such as lenders fees, legal fees, registration fees and stamp duty. With that being said, you will also need to factor in Lenders Mortgage Insurance if you borrow more than 80% of the value of your property. While it can be quite frustrating to take the extra time to build a larger deposit, the less you borrow, the lower your repayments will be.

Can I Get a Home Loan With No Deposit?

You may be permitted to acquire a home loan with no deposit under exceptional circumstances, however, it is extremely rare. Without a deposit, you would be relying on grants that are available, that would technically make up a portion of your deposit. It is important to note that although some lenders will allow you to borrow without a deposit, they will generally capitalise on the added level of risk in regard to another aspect of the loan such as higher interest rates.

How Can I Pay Off a Home Loan Early?

Depending on your type of home loan, you may be able to pay it off faster by taking advantage of these tips:

  • Update your repayment cycle: Set up your repayments in more regular instalments rather than committing to a monthly repayment cycle. Shortening the life of your loan can allow you to pay less interest over the life of your loan. For example, you can make 26 fortnightly payments compared to 12 monthly repayments in a year.
  • Make extra repayments: Additional repayments will decrease the amount of money you owe and will also lower the interest paid over the life of your loan. Start small and increase the repayments in line with your budget.

Use an offset account: Offset accounts can reduce the amount of interest charged on your loan.

How Can I Find The Best Home Loan Rates?

Greenline home loans have a team of experts who are always ready to help you with your loan needs. We offer a wide range of products and services that are designed to suit your specific needs. The team is available round the clock and will help you find the best home loan rates for your requirements.

Greenline loans offer a wide range of products and services, including variable rate, fixed-rate, interest only, redraw facilities, offset accounts and more!

Where Can I Get The Lowest Home Loan Rates?

Greenline Home Loans is a company that helps people get the lowest home loan rates. We make sure you are getting the best deal for your home loan.

Get in touch with us today to start your home loan journey.

SMSF Loan FAQs

What is a Self-Managed Super Fund?

A self-managed super fund is a super fund that you can manage on your own. Self-managed super fund loans allow for greater flexibility and permit investors to hold various assets such as shares, term deposits, cash and investment properties.

An SMSF can be very successful, although it does come bearing more risk compared to a regulated super fund. SMSFs can have up to four members and is in need of their own separate Tax File Number (TFN), Australian Business Number (ABN) and transactional bank account. Also, due to the fact that SMSFs are a type of trust, you must assign a trustee to have authority over the investment strategy, administrative tasks and financial statements.

What is a Self-Managed Super Fund Loan Application?

An SMSF loan application is a document that is required to get your loan approved. Each lender may require different documentation, but many will ask for copies of the SMSF trust deed, the custodian trust deed and the contract of sale.

For this application, you will also be required to show proof of sufficient personal income, bank statements, tax returns and audit certifications. This information will aid the lender in ensuring that everything is in order and that you are able to afford certain loan repayments.

How Much Can You Borrow on a SMSF Loan?

The amount of money you can borrow on an SMSF loan greatly depends on your financial situation as well as your lender and their policies. Depending on your lender, they can offer SMSF loans ranging from $100,000 up to $4,000,000. Greenline Home Loans offers maximum loans up to $2,500,000 for one security with maximum exposure of up to $4,000,000. Get in contact with our lenders today if you require a larger loan amount.

It may also be necessary to preserve a minimum amount within your SMSF after the sale of your property. This minimum amount may vary according to your individual circumstances.

Some lenders may also require you to keep a specific percentage of liquid cash. However, depending on your lender, it may be possible that they will waive this if the initial deposit is large enough or if the rental income covers the loan repayments.

Can You Get Cash Out/Equity Release from My Current SMSF Property?

Under the ATO ruling, once you purchase a property, you will not be able to refinance to get cash-out or use it as equity to purchase another property. The only way to get access to your equity will be to sell your property. If you have an existing investment property in your SMSF and you would like to buy another one, you will need to have enough funds in your SMSF to contribute the deposit and purchasing costs.

What Type of Lending is Required for SMSF Loans?

All lending in SMSF loans is required to be through a limited recourse borrowing arrangement (LRMA). Limited Recourse Borrowing Arrangements involve a self-managed super fund trustee taking out a loan from a lender. This trustee then uses these funds to purchase a single asset that is to be held in a separate trust. Any investment returns that are made from the asset go towards the SMSF trustee. If the borrower fails to pay principal or interest on their SMSF loan, the lender’s rights are limited to the asset held within the separate trust. This means that there is no recourse to the other assets that are held in the SMSF.

What are the Requirements of an SMSF Loan?

When it comes to applying for an SMSF loan, there are four main requirements:

  • The sole purpose of the property must be to provide retirement benefits or death benefits to SMSF beneficiaries
  • If it is a residential property, the property must not be obtained from a member of the SMSF or any related party of a member.
  • If it is a residential property, a member of the SMSF or any related party of a member must not be lived in or rent the property.
  • The property must not be a single obtainable asset.

What Does LVR mean?

Loan-to-value ratio (LVR) makes reference to how much you are borrowing in comparison to the value of the property. When you have a larger deposit, it means you will have a lower LVR. A lower LVR means that there is less risk to the lender. Depending on your lender, the maximum LVR for SMSF loans may vary.

Can I Refinance with an SMSF Loan?

It is possible to refinance your current SMSF loan, although few lenders offer SMSF loan for this very purpose. Many borrowers have taken out SMSF loans when interest rates were recorded higher or when their financial situation was different. In these instances, it is well worth looking into refinancing your SMSF loan in order to seek out if there are better options for your individual needs.

How Much Can I Borrow to Purchase a Residential SMSF Property?

Here at Greenline Home Loans, we offer up to 80% LVR for residential properties. For example, if you buy a residential property for $400,000, your maximum loan amount is $320,000. Therefore, you will require $80,000 in SMSF cash to complete a purchase, plus acquisition and loan costs.

How Much Can I Borrow to Purchase a Commercial SMSF Property?

Here at Greenline Home Loans, we offer up to 80% LVR for commercial properties. For example, if you buy a commercial property for $400,000, your maximum loan amount is $320,000. Therefore, you will require $80,000 in SMSF cash to complete a purchase, plus acquisition and loan costs.

What Costs Are Involved with SMSF Loans?

Generally, the following fees will apply to an SMSF Loan:

  • Application fee
  • Valuation fee
  • Legal fees
  • Monthly Administration/Service fees
  • Early repayment fees

Can My SMSF Loan Have an Offset Account?

Yes, however, only certain lenders offer an offset account. Greenline Home Loans offers a 100% offset account on SMSF loans. An offset account is a valuable feature for an SMSF loan as the cash held by the SMSF will offset the loan balance, which ultimately reduces your monthly interest repayments.

Asset Finance FAQs

Do I Have to Provide Additional Security When I Finance My Assets?

Typically, the asset that is being purchased is used as security for your loan. Although, in some circumstances, you may be able to utilise your current fixed assets as security in order to help raise the funds that you need.

What Information Do I Require for My Asset Finance Application?

Here at Greenline Home Loans, your asset finance application will start off with an initial discussion that will allow our finance specialists to find out some more information about you, understand your wants and needs and begging to compile information that will assist your application. Such information will include your employment history, residential history, information about the assets you are seeking to finance as well as an evaluation of your income and expenses.

After we have a better idea of what your needs are and what lender will be most suited to you, you will be required to provide important documents to support your application. This may include a copy of your driver’s licence, bank statements or payslips. Each lender has various criteria, so our finance specialists will advise you throughout your application process if anything additional is required from you.

What is the Difference Between Secured and Unsecured Loans?

The main difference between a secured and an unsecured loan is whether or not your lender requires security.

Secured business loans do require security. This may be in the form of property, inventory, accounts receivables or other assets. If for some reason you cannot meet the repayments of your loan, the lender may depend on these assets in order to clear any remaining fees, balances or interest from the loan.

On the other hand, an unsecured business loan does not need any physical assets to be used as security for your loan. Alternatively, your lender will generally view the strength and cash flow of your business as security.

What Is a Balloon Payment?

Balloon payments are lump-sum amounts that you pay to a lender at the end of your loan after all your regular monthly payments have been made. You may choose to incorporate a balloon payment to your loan as it ultimately reduces your monthly repayments during the term of your loan.

Speak to one of our professional finance specialists at Greenline Home Loans to discuss whether or not a balloon payment is a right fit for you and your loan.

Am I Able to Schedule Repayments to Better Suit My Cash Flow?

The answer is yes. Payment terms are usually monthly, however, they can be rescheduled in a way to better suit your cash flow. For example, businesses that are in the agriculture sector or in other seasonal-based industries are generally paid on an annual basis. Therefore, these businesses are able to restructure their repayment period to suit their financial needs.

What are the Benefits of a Chattel Mortgage?

Some of the benefits of a chattel mortgage include:

  • Interest rates: chattel mortgage loans are secured with an asset in which lenders view these loans to be of lower risk. Due to this, they often come with lower interest rates compared to an unsecured loan.
  • Potential tax benefits: since you own the asset, you may be able to claim interest and depreciation costs depending on the percentage of business use.
  • Less personal liability: as the purchased asset is used as collateral, lenders cannot repossess any of your other personal or business assets if you do happen to fail making repayments on time.
  • Higher loan values and longer terms: chattel mortgages generally come with higher maximum loan values, as well as longer terms in which you are required to pay back the loan.

What is the Maximum Loan Term?

The loan term greatly depends on the repayment amount that you can afford. Loan terms generally range from 1-7 years. If you are purchasing a used or second-hand vehicle, the loan term may be shorter depending on the age of the vehicle. It is important to remember that the longer the loan term, the more interest you will pay over the life of your loan.

Is a Novated Lease Better Than a Personal Car Loan?

Novated lease loans allow you to use your pre-tax income in order to pay for your vehicle repayments. This is a tax-effective strategy that is not available with a standard personal car loan. By making repayments this way, it can also minimise your overall taxable income to give you more money in your pocket. A novated lease agreement provides you with more options at the end of your lease period. You are able to pay out a residual and own the vehicle, extend the lease for a further term or even upgrade to a new vehicle without the hassle of having to dispose of the vehicle yourself.

How Do I Qualify for a Novated Lease?

To qualify for a novated lease there are four simple prerequisites that need to be met.

  • Must be permanently employed: you must be employed as a full-time or part-time employee. You may not be eligible for a novated lease as a casual employee as your salary can fluctuate.
  • Must pay tax: with a novated lease you can save money by reducing the amount of income tax and GST that you pay.
  • Must have completed your probation period: once you start a new job there is a probation period that you have to complete in order to secure your position within the company.
  • Your employer must offer salary packaging: as a novated lease is a contract between yourself, your employer and the financier, without your employer’s approval you will not be eligible for a novated lease.

When Does My First Finance Payment Begin?

This can greatly depend on your cash flow preference. The repayments can be set up as payments in advance, which is the first payment that is taken at the settlement of the transaction or payments in arrears. This means that the first payment is due one month from the date of settlement.

What Types of Asset Finance Do Greenline Home Loans Provide?

Greenline Home Loans offers three types of asset finance:

  • Equipment finance - secured loan backed by the piece of equipment as the collateral asset, which allows for a lower interest rate to apply to the loan.
  • Chattel mortgage - known as a goods loan where you can borrow funds to acquire an asset
  • Novated lease - a flexible, portable and convenient way to acquire a motor vehicle as part of an employee’s salary

Are you ready to rely on Greenline Home Loans asset finance solutions to help your business grow? Speak to one of our finance specialists today!

How Does an Equipment Loan Work?

When applying for an equipment loan, you are taking immediate ownership of the equipment and the lender takes a security interest. This arrangement may include an end-of-term balloon payment, meaning you will not be repaying the full principal of the loan over the life of the loan. The lender would release its security on the asset when the loan is fully paid.

Business & Commercial Loan FAQs

How Do I Qualify for a Business Loan?

Lenders consider numerous factors when assessing business loan applications, including your business experience, how much money you are putting into the deal, the type of business you own and your security property. You are more likely to qualify for a business loan if you have an existing business operating within a low- industry where financial failure is less likely. Although, please note that there are no set guidelines to qualify for a business loan as they are generally assessed on a case-by-case basis.

How Much Can I Borrow with a Business Loan?

The amount you can borrow for your business loan typically depends on the lender, the loan product and their assessment of your application.

Here at Greenline Home Loans, we have established a new partnership with a specialist lender that provides unsecured small business loans from $10,000 - $250,000. Together we can support your business in achieving your goals with your very own commercial loan.

What is the Easiest Way to Obtain a Business Loan?

Merchant cash advances are generally the simplest way to acquire a business loan. However, they are also the most expensive product available on the market.

Merchant cash advance companies purchase a lump sum of your future credit card sales. They advance you a set amount of money in which you are required to pay back a small percentage of your daily credit card sales.

Merchant cash advance companies usually move quickly and have the most flexible eligibility requirements of any online lender.

How Much Deposit Do I Need for a Business Loan?

There is no set deposit amount required for a business or commercial loan, as each business is unique. Although, many lenders need 10 to 30 per cent of the loan value as a deposit. This money can derive from savings, working capital, alternative finance instruments or as an external investment.

The deposit amount that you will need for your deposit loan will depend on these various factors:

  • Amount of money borrowed
  • Purpose of the loan
  • Personal credit history
  • Business credit history

How Long is the Term For a Commercial Loan?

Unlike residential home loans, commercial property loans generally range from 5 to 20 years. The repayment period is often longer than the term of the loan. For instance, a lender may write a commercial loan for a term of 7 years with a repayment period of 30 years. In this situation, the investor would make payments for 7 years of an amount based on the loan being paid off over 30 years, followed by one final balloon payment of the entire remaining balance of the loan.

Can I Get a Business Loan Without Collateral?

When you don’t guarantee collateral, it is called an ‘unsecured’ loan. The main difference is that you usually won’t be able to borrow as much, and you will pay a higher interest rate. Certain types of loans do not require existing collateral, you will be required to use what you are purchasing as collateral. For example, with equipment finance, the item you are purchasing acts as collateral while you are repaying the loan.

Can I Get a Business Loan With No Credit?

If you do not have a credit record at all, it can be quite challenging to acquire a business loan. The same is true if you have a bad credit history which can be a result of late payments and/or bankruptcy.

It is recommended to start somewhere if you have no credit record, such as obtaining a personal credit card with a low limit and ensuring that you make all the payments on time. This will help you build a positive credit record for when you wish to take out a large personal or business loan.

If you have bad credit, it can be difficult to get a business loan. Few non-bank lenders specialise in offering business loans to individuals with bad credit, however, they will tend to charge higher interest rates due to the higher risk.

What is a Commercial Business Loan?

Commercial loans are arranged between a bank and a business and are generally short-term, but the bank may allow loan renewals and extensions if necessary.

Commercial loans serve many functions. Businesses utilise commercial loans to expand their facilities, tap into new markets, purchase equipment or properties or even to pay off debt. Here at Greenline Home Loans, when it comes to commercial business loans, there is no one-size-fits-all. We take a customised approach to commercial lending as there is a big difference between the needs of a promising start-up seeking debt financing as opposed to a seasoned company purchasing another business.

How Do I Qualify for Overdraft Facility Loans?

You are able to apply for an overdraft facility loan as soon as your business loan is approved by a lender. In order to qualify for an overdraft facility loan, you have to meet the following requirements:

  • Business turnover is solid: you will be required to provide your latest balance sheet and profit and loss statement.
  • Have equity in an existing property: your existing property will be used as security. You can borrow up to 85 per cent of your property value for business purposes.
  • Can show legitimate business need: banks want to see that you have a need for an overdraft and that the need is regular and ongoing rather than a one-off cost that you need to cover.

As an award-winning mortgage brokering firm, Greenline Home Loans can find you a lender that understands the needs of business owners. Get in contact with us today!

Is Invoice Financing Right for My Business?

Invoice financing has now become a more favourable alternative to seeking bank loans. Invoice financing is the most beneficial source of funding for your business. It is far less restrictive as compared to traditional bank loans and it also offers far more flexibility. Invoice financing can help your cash flow and overall profitability for you business.

If you would like to seek out more information in regard to invoice financing, contact one of our professionals today here at Greenline Home Loans.

What is the Difference Between a Business Loan and a Business Line Of Credit?

Business loans and business lines of credit both offer capital for your business needs, although there are some crucial differences between the two.

A business line of credit is rotating credit that permits you to hold a balance that accrues interest. If you don’t use the line of credit, you are not required to make any payments. As long as you make the minimum payment each month when you do draw from the credit line, you can either pay your balance in full or whatever you can afford to pay. Your unpaid balance will accumulate interest.

On the other hand, a business loan is an instalment credit where you will receive a lump sum amount and make fixed monthly payments on it. It is important to repay the loan straight away, regardless if you use the money immediately.

Business loans are also limited to certain uses. For example, you can’t use the loan to pay your employees. However, a business line of credit can be used for any business purposes that you choose.

What Documents Do I Need to Apply For a Business Loan?

When applying for a business loan you may be asked to provide:

  • Financial statements
  • Proof of income
  • Bank statements
  • Identification
  • If you’re a start-up business:
    • Cash-flow projections
    • Business plan
    • Business contract of sale
    • Lease agreement

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If you have a question that’s not answered above, then feel free to get in touch with our friendly team today, to have all your questions answered.