Tech Advances - Making Loans Easier?

Written on the 16 August 2019 by Nathan Drew, Fox Finance Group

 

New Fin-Tech Advances - Is This Tech a Good Thing?

The rise of Fin Tech lenders has been slowly increasing over the past 5 or 6 years. Some of the Fin Techs have seen extraordinary growth by bringing something to the market that the big banks just weren't.

Fin Tech's largely started off offering business loans to SMEs but there are now many more players in the market offering personal loans and home loans to consumers.

Fin Techs have played a huge role in bringing technology advances into banking and making it easier for consumers and SMEs to gain access to a loan through a smooth, transparent, hassle free, cloud base online business platform.

For consumers and SMEs alike, having the ability to quickly access and apply online to a number of business lenders at once is very tempting. But is this a good thing?  Our experience tells us that it's not necessarily a good thing. Our team deal with a number of customers every day that have destroyed their credit file by clicking away with multiple personal loan applications online thinking that this way they will be able to sit back and see who comes back with the best deal. If you want to learn more about why this isn't a good thing and what lenders think of your credit score, follow the link.

Here are a few scenarios of people and businesses that we've helped with loans recently.

Scenario One

Type of loan: Personal loan
Time in job: 12 months full-time
Purpose of loan: To purchase a car and consolidate some other debt
Requested amount: $30K
Loan approval amount: $30K
Loan approval timeframe: Same day

Scenario Two

Type of loan:Car loan
Time in job: 6 months full-time
Purpose of loan: To purchase a car
Requested amount: $25K
Loan approval amount: $25K
Loan approval timeframe: Following day

Scenario Three

Type of loan:Home loan
Time in job: 5 years full-time
Purpose of loan: To purchase their principal place of residence
Requested amount: $450K
Loan approval Amount: Up to $670K
Loan approval timeframe: Same week

Scenario Four

Type of business: Retail Operation
Required for: Purchasing inventory for upcoming busy period
Time in business: 8 years
Annual revenue: $1.3 Mil
Challenges: Current ATO tax debt of $20K
Additional Information Requested: Business bank statement linking and previous two BAS statements
Requested amount: $100K over 24 months
Loan approval amount: $100K over 24 months
Loan approval timeframe: Same Day

Scenario Five

Type of business: Equipment Hire Company
Required for: Purchase more equipment to hire out
Time in business: 2 years
Annual revenue: $750K
Challenges: Director had previous poor credit
Additional Information Requested: Business bank statement linking
Requested amount: $65K over 18 months
Loan approval amount: $65K over 24 months
Loan approval timeframe: Following Day

Scenario Six

Type of business: Café
Required for: Purchasing coffee and cooking equipment
Time in business: 3 years
Annual revenue: $530K
Challenges: Seasonal business
Additional Information Requested: Business bank statement linking
Requested amount: $50K over 24 months
Loan approval amount: $50K over 36 months
Loan approval timeframe: Same Day

Now, for business owners, here is a little more about what some of these Fin Techs can offer business owners.

In a nutshell, SMEs that qualify can get access to amounts of between $10k - $500k over 6mnth - 36mnth terms. 100% Unsecured, in some cases with no set up fees, no ongoing fees and no fees for early repayment. Now that's good news for any business.

Some loans can be assessed based on providing a link to your business's main transaction account bank statement alone which can be simply supplied electronically at the time of application. Again, this is another improvement on how you can safely and securely provide your income details to the lender in the push of a button.

For larger business loans, the use of cloud base accounting platforms such as Xero and a host of other cloud-based accounting software companies like MYOB, Quickbooks etc. allows the Client to share the necessary information to assess their application in minutes. This could include your up to date Profit and Loss and Balance Sheet. Again, this happens within a simple online process and once all of the information is provided, a decision can be made within minutes on whether a loan is able to be approved.

Our SMEs borrow for things like:

Cashflow to manage working capital
Pay their ATO Tax Debt
Re-consolidation of other business debt like CCard and other loans they may have Inventory
Wages and superannuation
Deposit on commercial property purchases
Equipment purchases
GST payments
Retail shop fit outs
Restaurant fit outs and the list goes on.

The list of industries and businesses that can gain access to this sort of funding is very broad so please speak with us if you'd like to know if your business qualifies.

If you would like to know if you personally, or your business would qualify for a loan, our team are ready to speak with you now on 1300 665 906.  There is no obligation to complete an application, we are simply here to answer any of your questions and if you like what you here then you can make the decision then to proceed. If not, no hard feelings.