Declined by Shift, or the limit came back too low?

If Shift declined your application, or would not raise a limit, the facility was most likely sized on your turnover and payment history. HomeSec lends a lump sum of $20,000 to $5,000,000 secured on real estate instead, with an open term, no penalty for repaying early and up to six months of no repayments, sized on equity rather than turnover.

If Shift declined your application, said no to a higher limit or wound a limit back, the business probably needs more room than its turnover is judged to support. HomeSec offers Australia's fastest and most flexible business loans, with up to 6 months no payments, and the amount comes from the equity in property rather than the size of last year's sales.

About Shift, briefly

Shift provides business finance to Australian small and medium businesses, including overdraft and line-of-credit style facilities, trade finance and cash flow funding. A revolving limit that matches the rhythm of the business can be a useful tool, and for plenty of businesses it is exactly the right one.

Why a limit gets refused, capped or cut

Revolving facilities are reviewed against how the business trades and how the account has been run. These are the usual reasons the answer disappoints:

• Turnover does not support the limit asked for. A limit is often a fraction of annual sales, so a business that needs a bigger buffer than its turnover justifies hits a ceiling.
• The facility has been running close to full. An account that sits near its limit for months can make a lender wary of extending it.
• Supplier invoices bigger than the trade line. A large order, an early-payment discount or a seasonal stock buy can need more than a trade facility will cover in one go.
• A change in the business since the last review. Lower margins, a lost customer or a slower debtor can lead to a smaller limit at review.
• Another lender withdrew first. When a bank pulls an overdraft, the next lender sees the withdrawal before it sees the business. When the overdraft is withdrawn.

A lump sum with room to move

A HomeSec loan is not a revolving limit. It is a lump sum, set by the equity in property, on a term you choose: no minimum, no maximum and no penalty for repaying early. Ad-hoc paydowns from $10,000, once outside the capitalised-interest period. For many businesses that does the job they wanted the bigger limit for: it clears the pressure in one hit and can be paid down as money comes in.

Some businesses keep a smaller revolving facility for day-to-day swings and use a property loan for the large, lumpy need. That can be a sensible split. More on working capital loans.

Where we see this most

Wholesalers and distributors buying ahead of a season, and transport operators whose fuel, tyres and wages run weeks ahead of customer payments. See wholesale and distribution and transport and logistics.

What to do in the next 24 hours

1. Work out the peak you need to cover, not the average. That is the number a lump sum should be built around.
2. Check what your current facility allows, and whether you want to keep it alongside a property loan.
3. Have the property details ready: address, rough value and what is owing.
4. Plan the paydowns. When larger amounts come in, from which customers, and roughly when.
5. Call a Lending Manager to see whether it works before applying anywhere else.