Private funding is an alternative to Bank funding. It is generally provided for short to medium terms and allows a borrower to take advantage of opportunities that traditional funders would not be interested in. Traditional funders have constraints with what they can provide whereas private funders will recognise the positive return on the investment opportunity rather than historical performance.
Why Private Funding
Typically private funding would be sought for the following:
- Investment transaction where the existing business may not show the level of performance historically to meet interest.
- Credit impairment where a traditional funder may be looking to exit as debt has “termed out”.
- Insolvency or administration issues
- ATO or other statutory payments have not been met.
- Property Development transaction where the loan to end value is acceptable but there is insufficient equity initially in the project.
- Purchase of stock or importing of raw material where there is insufficient funds available to meet the inventory requirement.
- Working capital where there is no further equity available with real estate security.
- Debt restructuring as a result of issues with existing funders.
Over time, the objective would be to transition funding to major banks, and Macarthur Finance & Capital will work with you to achieve the best possible long term solution. We are very happy to talk to you about private funding and how it may help you.