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  4. The Challenges of Getting Finance for Your Business

The Challenges of Getting Finance for Your Business

Even if you’ve got the runs on the board, it can be nearly impossible to convince the big banks to lend you the money needed to realise your business dreams.

Many a world-beating business has been grown on the back of credit cards, overdrafts, personal loans, a refinanced mortgage or a helping hand from family and friends.

Banjo Loans is giving small businesses another, easier option to access capital.

By linking to your accounting software, we can consider your business activity – not just assets and collateral. The funds will likely hit your account within three days, so you can concentrate on your business.

 

But let’s take a look at two businesses that are already going gangbusters, and find out how they managed to fund their growth.

 

Yo-get-it: 18 stores and counting

 Scott Bradley was 23 when he and co-founder Sean Towner founded frozen yoghurt chain Yo-get-it.

 “When Sean and I first started Yo-get-it, none of the banks wanted to touch two 23-year-olds,” says Bradley, now 29.

 But the friends, former construction project managers, were not going to be put off their dream. Luckily Bradley had $70,000 up his sleeve from TV game show Deal or No Deal.

 Adding their own savings to the pot, Bradley took a 41 per cent share of the company, Towner invested in 36 per cent, and friends and family invested in the remainder.

 

Along with their own difficulties in getting bank finance, Bradley says potential franchisees also faced an uphill battle.

 

“They’d go and try and get business loans, but even with the backing of Yo-get-it, if the franchisees didn’t have a house or generally 80 per cent of the cash upfront, not even the big four banks would want to touch them.”

 

After some early success, a well-known businessman assisted the young entrepreneurs by putting his name to a bank loan, which he also had to personally guarantee.

 

Opsis: Too much work, not enough staff

Gill Walker, owner of specialist customer relationship management (CRM) company Opsis, is facing a sticky wicket. She’s got more work than she handle, but can’t convince anyone to inject the cash she needs to invest in more staff to grow the business.

 

“It’s a complete circle that I’m failing to break,” says Ms Walker, who has run the business since 2004.

 

“It seems from my experience that the only funding available requires you to put your house on the line. Our house is totally owned by my husband, so that’s not an option.”

 

Ms Walker said if she were to secure funding, she would likely spend it on a results-based salesperson to bring in work, followed by another staff member to help carry it out. For the moment, she is stuck in the “feast and famine scenario” – a situation many small business owners will relate to. “Work does not parallel billings either,” says Ms Walker.

 

How Banjo can help

If you’re going great guns, but having trouble securing finance, why not try an alternative source of funding with Banjo? By looking at more than just your collateral and assets we are able to approve more loans. You can apply in about 10 minutes from your laptop, desktop or mobile.

 

After we receive your application, one of our team will give you a call.

 

Of course, if you’d prefer to speak to us first call 1300 BANJO LOANS.

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