A non-bank lender has announced that it is piloting a new loan product that will enable small businesses access to credit without needing a mortgage for security against the loan.
Non-bank lender Liberty Financial has announced it is piloting a new loan product for small business customers that will lend up to $1 million without requiring the use of the family home or any real estate as mortgage security.
Liberty Lift offers loans from $25,000 to $1 million to businesses with strong credit profiles that have been in operation for three years or more.
Loan terms up to five years are secured by business cash flow and not a mortgage security.
The firm quoted data from the Reserve Bank of Australia, which showed credit approvals to business for $2 million and under has reduced by 13.6 per cent from June 2018 to June 2019. Recent surveys have also showed the percentage of small to medium enterprises (SMEs) reporting cash flow issues has doubled since March 2018, with 19.6 per cent saying it is worse or significantly worse.
Group sales manager John Mohnacheff said Liberty seeks to address this gap for small businesses that are well established but still developing.
“For your application we will need the businesses’ financial statements and completion of a streamlined application form,” Mr Mohnacheff said.
“We won’t require a mortgage for security against the loan, so the whole process is hassle-free and supported by Liberty’s leading service levels.”
[Related: Rise of the non-banks]