Fast business loan approval is not reckless lending
A HomeSec presenter on why a fast lending decision is not a careless one: a lender using its own money, one team making the call, and an assessment built on the security and the borrower's situation.
- A lending decision is fast when fewer people have to agree and less has to be proved, not because fewer things are checked.
- Property-secured lending can be quick because the security and the exit can be assessed in days, where income evidence takes weeks to gather.
- Still checked on every file: the title and who owns it, the property's value at today's market, the business purpose, identity and the exit.
- Speed is a warning sign when it comes with a guarantee of approval before anyone has looked at the property, or a fee before any written offer.
What the presenter says
Under the title card "Why we can do this (and others can't)", the presenter makes one argument: fast lending is experienced lending, not reckless lending. HomeSec lends its own money, has seen most scenarios before, and does not send a deal through six departments or wait for an outside party to say what it may fund. The team looks at the security, assesses the situation and makes the call, which is why, the presenter says, bad credit and loan arrears are often not a barrier.
Where the time goes in a slow loan
The weeks in a typical business loan application are not spent deciding. They are spent gathering two or three years of financials, waiting for a valuation to be booked and returned, and passing the file between people who each have a queue: a relationship manager, an assessor, sometimes a committee. Every one of those steps exists because the lender's real protection is the business's income, and income has to be proved. Take that dependence away and most of the queue goes with it.
What a fast lender is still checking
When property secures the loan, the questions change rather than disappear. Is the title what the borrower says it is, and who has to sign? What is the property worth today, and what is owed on it? Is the money for a business purpose? How will the loan be repaid at the end? Each of those can be answered in days, from a title search, an appraisal at today's market and a conversation. The appraisal is explained in the video on valuing property without a valuer. The credit file is read as part of it, and a person weighs it against everything else rather than letting a score decide.
When speed should worry you
Wanting money quickly is reasonable, and so is being suspicious of anyone who offers it. Three things separate a quick lender from a careless or predatory one. A careful lender asks how the loan will end, because it wants to be repaid, not to end up owning a problem. It puts every cost in writing before you commit. And it never guarantees approval before it has seen the property and the purpose. The guide to fast business loans sets out the three timings honestly, and the box below gives HomeSec's published terms.
Questions people ask next
Does a quick decision mean less is checked?
Who makes the call on a HomeSec loan?
Why does experience make a lending decision faster?
The video is the short version. The written guide has the detail: fast business loans, and what actually makes them fast.
To talk it through about your own property, ring a Lending Manager on 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.
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Reviewed by Jason Brockmuller, Joint Chief Executive