The Current Lending Environment Is Tough—What Can You Do to Ensure Approvals?
Financial institutions are suggesting borrowers are pulling back from extra borrowing or making additional repayments to their mortgage repayments.
“The Brokerage” is a finance company that has worked with a number of Advivo clients to minimise risk and maximise returns, leveraging their years of experience, knowledge, resources and strong relationships. The Brokerage are a team of highly experienced property finance professionals who deliver a full range of loan solutions to property developers, investors, businesses and property owners. Advivo interviewed Troy Williams of The Brokerage about the current lending environment.
Troy explains that the current lending environment has been thrown into turmoil with lenders applying GFC like caution on all customer applications. He says the Bank’s main focus of questioning is:
- how was your business impacted during COVID and
- what does income/business look like FY21 and beyond.
They are also very cautious of the hospitality, tourism and commercial retail investment sectors as social distancing measures impact trading performance.
Troy states that “it has never been more critical to have your YTD financials up to date, ATO portals clear, forecasting done (with robust assumptions) and a clear strategy of how the business will manage during/post COVID. More weight is added when an accountant has been involved in devising a post-COVID business strategy, which must include a forecast. This gives lenders comfort that the management team is capable and proactive; perception is key in this current environment”.
Thank you to Troy Williams from The Brokerage for providing insights on the current lending environment.
Having a well-considered and well-prepared budget and monitoring actual performance on a monthly basis to that budget is one of the best ways to ensure a swift and managed recovery. Just as many lenders are now requiring Three Way Forecasts to assist in their decision-making, business owners can take their own forecasts a step further, turning them into fully functioning financial models.
At Advivo, we offer our own version of this report to our clients known as ‘The Future Fitness 3-Way Report™’ which enables us to efficiently and systematically provide financial insight into our clients business, its viability, the viability of your future aspirations in changing times and circumstances, or for a specific project. The insights uncovered by 3-way reporting helps our clients influence and drive the strategic direction of their business and identify and mitigate risk as well as providing an ongoing monitoring mechanism that enables them to pivot if necessary.