Growing your business organically is a challenging task at the best of times. Sometimes however, you need access to finance quickly to meet cashflow requirements or to fund expansion opportunities.

Through our network of commercial lenders, we can help you find the best source of commercial finance, with the lowest rate and flexibility to match your business requirements.

A typical business loan for growth will take into account the following factors:

Ability or capacity to repay.
Lenders will want to see two sources of repayment -- cashflow from the business, plus a secondary source such as collateral.

In order to analyse the cash flow of the business, the lender will review the business's past financial statements. Generally, lenders feel most comfortable dealing with a business that has been in existence for a number of years because they have a financial track record.

If the business has consistently made a profit and that profit can cover the payment of additional debt, then it is likely that the loan will be approved. If however, the business has been operating marginally and now has a new opportunity to grow or if that business is a start-up, then it is necessary to prepare a thorough loan package with detailed explanation addressing how the business will be able to repay the loan.

TMS Commercial has the experience and relationship with a range of lenders to develop a loan package that address sepcific issues relating to both start up and established businesses.

Credit History
One of the first things a lender will determine when a business requests a loan is whether their personal and business credit is good. Therefore before you go to the bank, or even start the process of preparing a loan request, TMS Commercial will be able to assist you to review your credit history and ranking.

Equity
Lenders want to see a certain amount of equity in a business. Equity can be built up in a business through retained earnings or the injection of cash from either the owner or investors.

A business owner usually must put some of her/his own money into the business. The amount an individual must put into the business in order to obtain a loan is dependent on the type of loan, purpose and terms. For example, most lenders want the owner to put in at least 20 - 40% of the total request.

Example: A new business needs a $100,000 to start. The business owner must put $20,000 of her own money into the new business as equity. Her loan will be $80,000. The debt to equity ratio is 4:1. Note also that this is only one of many factors used to evaluate the business -- just having the right debt/equity ratio does not guarantee you'll get the loan.

TMS Commercial is able to assist you to idenitfy the right mix of equity to attract financing at the lowest rate.

Collateral
Financial lenders are looking for a second source of repayment, which often is collateral, for security reasons. 

Collateral are those personal and business assets that can be sold to pay back the loan. Every loan program, even many microloan programs, require at least some collateral to secure a loan.

The value of collateral is not based on the market value. It is discounted to take into account the value that would be lost if the assets had to be liquidated.

TMS Commercial will work with lender's, on your behalf to minimise your personal risk of loosing collateral value.