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For many Australian businesses, accessing traditional bank loans can be challenging, especially when rapid growth requires immediate capital. When one of our clients needed cash for new inventory to fuel expansion but found traditional lending unavailable, Innovate Funding offered a tailored non-bank solution. Using the client's property as leverage, we structured a loan with favourable terms at 9% p.a. interest, 55% Loan-to-Value Ratio (LVR), and a 12-month term with interest capitalised upfront. This flexible solution enabled them to secure the funds they needed to grow without the rigid criteria that banks often impose.
The Client's Funding Challenge: Growth Stifled by Traditional Loan Requirements
Our client's growing business needed inventory financing to capitalise on peak season demand. However, traditional banks viewed their revenue profile as "unserviceable," meaning they did not meet the stringent cash flow or credit requirements for a conventional loan. Although their business was profitable, their financials needed to align with bank benchmarks, and they faced the risk of missing out on key growth opportunities due to a lack of funds.
For many small to medium-sized enterprises (SMEs) in Australia, particularly those in growth phases, bank lending requirements can be too restrictive. This client's situation highlighted a common challenge: profitable businesses with ample potential are often excluded from funding simply because they need to fit the standard lending model.
Our Solution: A Tailored Non-Bank Loan with Property Leverage at 9%
Innovate Funding specialises in non-bank lending solutions, prioritising flexibility, speed, and customised support. In this case, we leveraged the client's property as collateral to offer a tailored loan solution with favourable terms explicitly designed for their needs.
Here's how we structured the loan:
Loan-to-Value Ratio (LVR)—After we valued the client's property, we offered a loan at a 55% LVR. This LVR gave them sufficient capital without over-leveraging their assets, ensuring manageable risk.
Competitive Interest Rate of 9% p.a. – Understanding the client's budget constraints, we secured a competitive rate of 9% p.a., providing a cost-effective alternative to other non-bank options.
12-Month Term with Interest Capitalised Upfront – To ease cash flow pressures, we capitalised the interest upfront, meaning they didn't need to worry about monthly interest payments during the loan term. This 12-month structure allowed them to focus on generating revenue from their new inventory rather than managing monthly interest obligations.
Quick Approval and Funding—Innovate Funding's streamlined process allowed the client to access funds rapidly, a significant advantage when time-sensitive growth opportunities were at stake.
This customised, property-backed loan structure enabled our client to secure a vital cash infusion without restrictive servicing requirements. By capitalising on the interest upfront, we created a low-maintenance financing solution, freeing up the business's cash flow to focus on growth.
The Non-Bank Lending Advantage: Why Traditional Loans Aren't Always the Best Fit
The flexibility of non-bank lending solutions allowed our clients to overcome traditional lending obstacles and access funds. Here's how non-bank lending can stand out as a viable alternative for businesses:
Flexible Approval Criteria—Unlike banks, we don't impose one-size-fits-all credit and cash flow requirements. Instead, we consider each business's unique aspects and tailor our solutions accordingly.
Leverage Assets, Not Just Cash Flow – Using property or other assets as collateral allows us to access more significant loan amounts without relying solely on cash flow projections.
Capitalised Interest to Ease Cash Flow – Capitalising interest upfront gives the borrower a grace period from monthly payments, which is ideal for businesses focused on reinvesting in growth.
Fast Turnaround – Our simplified application and approval processes mean businesses can access capital in days, not weeks or months, making it easier to seize new opportunities.
These features make non-bank lending a lifeline for Australian SMEs that need capital but must be improved by the rigid criteria imposed by banks.
The Impact: From Funding Gap to Growth Success
With their Innovate Funding loan in place, our client was able to transform their cash flow limitations into a growth opportunity. The funds secured through our non-bank solution allowed them to:
Purchase Bulk Inventory at Discounted Rates—The funding enabled the business to take advantage of bulk purchase discounts, reducing inventory costs and increasing profit margins.
Optimise Cash Flow with Capitalised Interest—With interest capitalised upfront, they had no monthly payments, freeing up cash flow for day-to-day operations and immediate growth needs.
Achieve a Stronger Market Position – By stocking more inventory, the business could meet higher customer demand and improve market share, particularly during peak season.
Build Supplier Relationships – The business also strengthened relationships with key suppliers, which could lead to better pricing and favourable terms in the future.
The loan provided by Innovate Funding enabled the client to seize an opportunity that would have otherwise been out of reach. Their business has the inventory levels to drive significant revenue growth, laying a solid foundation for expansion.
Why Non-Bank Loans are an Effective Tool for Australian Businesses
Australian SMEs increasingly turn to non-bank lenders for funding solutions that align with their business needs. With flexible, asset-backed solutions, non-bank lenders provide a practical pathway for businesses seeking capital outside the traditional banking sector. Here are some reasons why more Australian businesses are choosing non-bank options:
Tailored Financing Terms—Non-bank lenders like Innovate Funding offer customised loan structures that meet each business's specific needs, like capitalised interest or flexible LVRs.
Access to Capital When Banks Say No – Non-bank lenders are willing to work with businesses that may not have a "bank-friendly" profile, offering a lifeline for companies that need cash but don't meet rigid bank criteria.
Empowered Business Growth—Non-bank loans can fuel business growth by providing a quick, substantial funding solution that aligns with each business's goals, whether for inventory, equipment, or expansion.
Innovate Funding: A Trusted Partner in Non-Bank Lending
At Innovate Funding, we pride ourselves on creating accessible, flexible loan solutions that support Australian businesses' growth objectives. Our non-bank loans are designed with a commitment to rapid approvals, competitive rates, and a deep understanding of each client's unique needs.
We understand that every business is different, and we're here to tailor our services to meet those individual needs. Our recent success story with this client, made possible by offering a competitive 9% p.a. interest rate on a 12-month term with a 55% LVR, exemplifies our dedication to creating funding options that drive results.
Whether you're a growing SME seeking inventory financing, a property-backed loan, or an alternative to traditional lending, Innovate Funding can help you access the capital you need to reach your goals.
Is a Non-Bank Loan Right for Your Business?
If your business faces funding challenges with traditional banks, a non-bank loan may offer the flexibility and speed you need. Here are a few considerations to help determine if it's the right fit:
Assets for Collateral – Property-backed loans, like the one we provided for this client, can offer quick access to capital without strict cash flow requirements.
Seasonal or Growth-Driven Cash Flow Needs – Flexible loan terms, like capitalised interest, can give your business breathing room to focus on expansion rather than monthly payments.
Competitive Interest Rates and Terms – Look for lenders that offer competitive interest rates and LVR terms suited to your business's asset and cash flow profile.
Final Thoughts: Empowering Growth with Non-Bank Lending
Thanks to Innovate Funding's tailored, property-backed loan at a 9% p.a. rate, our client was able to secure the funds necessary for inventory expansion and sustainable growth. Non-bank solutions provide a flexible, quick pathway to reaching growth goals for businesses that don't fit the conventional banking criteria but have assets like property.
Innovate Funding's tailored, asset-backed loans could be the solution if your business needs capital but needs help from traditional lenders. Reach out to our team to explore how we can support your business with the flexibility and speed that traditional banks often lack.