Some Actual Scenarios Where Short-term Lending Was The Right Solution For Borrowers
July 20, 2013
Very often, SMMEs (small and medium sized enterprises) find that the traditional banking system isn’t able to meet their needs for short-term loans. Formal banks generally have an inflexible approach to short-term finance, and the process of assessing the loan and settling it is very lengthy and very involved.
However, there are alternatives if SMMEs require urgent finance – and the are the specialists in short-term lending. One such outfit, Quantum Credit, specialists in short term business finance in Australia, has provided the following scenarios to show how quick access to funds can help SMMEs achieve their business goals.
Urgent cash requirement
In this example, the borrower required $500 000 as part payment for a shipment of stock worth several million dollars with daily holding costs in the tens of thousands of dollars. The borrower went to short-term finance specialist, Quantum Credit at four o’clock on a Friday afternoon, with the funds required by the Monday morning. The short-term loan was approved with first mortgage security, was documented by special arrangement with solicitors over the weekend and funding was provided to meet the deadline.
Substantial growth opportunity
The borrower had won a major supply contract for mining equipment, but the terms of payment were 120 days. To meet this contract, they needed to order from their supplier but those contract terms were 30 days – and the client’s bank wasn’t able to provide the funding within the requisite timeframes. Quantum Credit provided short-term funding secured by the second mortgage against the property of the business owner within a few days and the short-term loan was repaid on 120 days when the mining company paid the client.
These are just two examples where short-term funding can help small and medium sized businesses across Australia to achieve their objectives, where formal banks can’t.