How To Check HECS Debt — Can It Affect Your Home Loan Application?

Most business owners will have to approach a lender for capital at least once during their lifetime. Two common loan types you may encounter during your search are business loans and commercial loans. While they may seem interchangeable, these loan types serve different purposes and can impact how you finance your company’s growth and operations. In this blog post, we’ll define business and commercial loans and their uses so you can select the right solution for your borrowing needs. What is a business loan? A business loan is a broad term that includes various types of financing specifically designed for small to medium-sized enterprises (SMEs). These loans cover everyday business expenses, such as purchasing inventory, managing cash flow, investing in new equipment or expanding operations. Business loans are available in two types: secured and unsecured. A secured business loan asks for collateral, typically the property or equipment you are purchasing. On the other hand, an unsecured loan does not require collateral, though some lenders might request a personal guarantee to safeguard their repayments. In Australia, there are generally three types of business loans: Lines of credit - Similar to a credit card, lines of credit are flexible loans that allow businesses to draw funds up to a set limit as needed. Many businesses are profitable but sometimes struggle with cash flow. A line of credit can help business owners relieve cash flow pressures that arise in any business Invoice financing - One of the biggest issues small businesses encounter is delayed or unpaid invoices from merchants. Invoice financing refers to loans based on outstanding invoices, improving cash flow by bridging gaps caused by payment delays. Equipment loans - As the name suggests, equipment loans refer to financing for purchasing or leasing equipment. Many businesses opt for this type of financing when they need to upgrade equipment or expand their existing suite of tools. Universal Finance Corporation has decades of experience providing financing solutions for small, medium and large-scale businesses. We can also offer tailored financing solutions for acquiring a business to ensure you receive the right financial support. Our team of brokers thoroughly understands the complexities and financial demands involved in acquiring a business and can help you navigate the process with ease. How do commercial loans work? Commercial loans are larger-scale financing options that established businesses, corporations or developers typically use. They provide the necessary capital for various purposes that help businesses grow, expand and manage cash flow effectively. The length of a commercial loan has a range of up to 30 years. It's also common for commercial loans to include an initial interest-only period for the first few years before transitioning to standard principal and interest repayments. Commercial loans usually require collateral, typically the asset you want to purchase. If the borrower defaults, the lender has the right to seize the collateral to recover the outstanding loan amount. Some of the most common reasons business owners take out a commercial loan include: Purchase a commercial property - Many businesses secure commercial loans to acquire office buildings, retail spaces, warehouses or other property types to expand their operations. Owning a property is a stable asset for business owners and potentially reduces long-term costs compared to leasing. Remember that lenders typically assess the property’s value and your business’s overall financial health when determining your borrowing capacity, which could impact the amount you need to borrow. Expand business operations - Whether you’re planning on opening your doors at a new location, entering new markets or expanding your production line, a commercial loan can make it happen. Commercial loans can be used in this context to cover expenses related to hiring staff, marketing initiatives and infrastructure development or expansion. Fund large-scale construction projects - Commercial loans tend to fall within the same category as construction loans, enabling developers to fund large-scale projects such as building commercial spaces, multi-unit residential buildings or industrial facilities. Aside from land acquisition, a commercial loan can also cover costs associated with material purchases, labour and other development expenses. It's important to note that commercial loans vary in terms of lending criteria and structure, so comparing your options is essential to ensure you’re getting the most competitive deal. That said, not every business owner has the knowledge or time to sift through the business and commercial loans available. That’s why many are turning to the expertise and network of experienced brokers like the team at Universal Finance Corporation. We can provide insights into the most suitable financing options and guide you through the loan application process. Select the right lending solution for your business with Universal Finance Corporation Give your business the best chance at success by accessing the best commercial and business loans in Australia based on your financial needs. At Universal Finance Corporation , we understand choosing the right loan type is crucial - whether you’re looking to manage cash flow, invest in new equipment or embark on a significant commercial project. That’s why we do all the heavy lifting to find the right loan for you. Our brokers have access to a wide pool of lenders, from the Big Four banks to credit unions, various tested and trusted private lenders and online lenders, to ensure you receive the most competitive lending solution for your business’s needs. We’ll sit down with you to understand your business and its goals before determining your borrowing capacity and the type of loan you may qualify for. To learn more about how we can find the right business or commercial loan, get in touch with us today and schedule an appointment.

Whether you’re a freelancer or run your own business, it’s safe to say the standard nine-to-five working dynamic is no longer the norm. Unfortunately, lenders and banks are still playing catch-up to this way of working. When applying for a home loan, most lenders expect borrowers to submit extensive documentation, such as payslips, tax returns and financial statements, to verify income and financial stability — traditional forms of documentation you may not have access to. This is where a low-doc loan comes into play. In this blog post, we’ll explain what a low-doc loan is and how it can help you unlock property ownership. What is a low-doc loan? A low-doc loan is a mortgage option in which borrowers can provide alternative documentation to show their capacity to repay the loan. Although interest rates may be slightly higher than those on standard loans due to the additional risk for lenders, low-doc loans open up new opportunities for those who don’t fit the mould of conventional lending.  Who can benefit from a low-doc loan? Given their unique structure and requirements, low-doc loans are geared toward borrowers with unique or variable income structures. Some of the groups that can fall into this category include: Self-employed individuals — Small business owners, contractors and freelancers often have fluctuating incomes and may not have the traditional documentation that standard loan applications require, such as regular payslips. Investors with complex financial structures — Property investors with multiple income sources may find it difficult to present streamlined financial records that align with typical bank requirements. A low-doc loan can offer more flexibility in these cases. New Australians or recent business starters — Individuals who have recently moved to Australia or started a new business might not have an extensive financial history, making it difficult to qualify for a traditional mortgage. Fast and flexible financing when you need it — five benefits of low-doc loans in Australia While no two borrowers are the same, every applicant deserves the opportunity to own property. And if you’re considering a low-doc loan to fund your upcoming property purchase, you can look forward to the following five benefits: 1. Flexible documentation requirements Low-doc loans accept alternative financial evidence, such as bank statements, Business Activity Statements (BAS) or an accountant's letter, to support the loan application. This makes showcasing your borrowing capacity and creditworthiness easier for prospective lenders. 2. Access to property investment opportunities For many Australian investors, proof of finances isn’t always as cut and dry as a simple bank statement. Investors who lack clear-cut financial records can still access financing through low-doc loans, allowing them to take advantage of new and emerging investment opportunities. 3. Faster application process The loan application process tends to be quicker without the need to gather extensive paperwork, which is beneficial for borrowers looking to secure financing quickly to purchase their dream property. 4. Tailored repayment options Depending on the lender’s offerings, you may be able to secure a low-doc loan that aligns with your lifestyle and payment cycle. For instance, some lenders offer repayment flexibility, such as customised repayment schedules, to cater to borrowers with varying cash flows. 5. A pathway to borrowing for new business owners Entrepreneurs and newly self-employed individuals can use low-doc loans to invest in property or refinance existing loans, even without a long history of financial documentation. How a mortgage broker can help you find the right low-doc loan for your needs As we’ve gathered, low-doc loans aren’t your run-of-the-mill home loan. They demand a deep understanding of how they work, which is why many savvy Australians are now turning to the expertise of a mortgage broker to guide them through the process. Here’s how a mortgage broker can assist you with your low-doc loan: Identifying suitable lenders based on your financial profile — Not all lenders offer low-doc loans. A mortgage broker can help match you with lenders more inclined to approve your application based on your financial situation. Navigating complex requirements — Brokers understand the complexities of the low-doc loan process. They guide you on what documentation will be accepted and ensure your application is strong and compliant with the lender’s expectations. Negotiating rates on your behalf — Mortgage brokers have access to a wide pool of lenders and can negotiate more competitive loan terms, helping you secure the best possible deal. Saving time and reducing stress — Brokers handle most of the legwork involved in applying for a low-doc loan, from comparing products to liaising with lenders, freeing up your time and reducing the stress of the lending process. Find the right low-doc loan with Universal Finance Corporation At Universal Finance Corporation , we specialise in connecting borrowers with the most competitive lending solutions. Whether you’re self-employed, an investor or simply lack the traditional paperwork required by other lenders, we can help you navigate the process and find a low-doc loan that best aligns with your needs. With more than 30 years of experience by your side, you can trust Universal Finance Corporation to manage your loan application. To learn more about our services, please contact us today.