Borrowing from the banks - How lending has changed in a COVID-19 world
23 September 2020
COVID-19 has undoubtably changed the world we live in. One of the major changes it has had for individuals and business borrowers is the ability to access credit for home, investment, or business loans in a timely manner, or at all, depending on the industry you work in.
Now, more than ever, it is imperative you seek professional advice and support before approaching your bank for finance.
Borrowing tips for business owners and self-employed
Borrowing from the banks is more of a challenge for business owners now than it has been for many years. The effectiveness of the banks’ back office systems have been greatly impacted by the implementation of COVID-19 credit policies and hardship products, which have significantly increased compliance demands and turnaround times for applications from submission to
Being organised and doing the preparation required before you submit an application to borrow, will give you the best chance of meeting any funding deadlines you may have. To prepare, you should consider:
Getting your financials up to date.
Understanding what impacts COVID-19 has had on your business and the likely future impacts.
Your current and future plans for your business, including succession planning, key man risk and retirement plans.
Whether your tax obligations are current and up to date.
Adequate lead time for your application given bank turnaround times are between six and 16 weeks.
Whether your current bank is the right fit for your current and future banking needs.
Borrowing tips for individuals
Working with a Findex lending adviser that has access to more than 35 different lenders in the market, can help you find a solution that is tailored to fit your specific needs and situation. Individual borrowers should consider:
Whether they have pre-approval in place before looking to buy.
How much they can borrow.
Whether they have a sufficient deposit.
Turnaround times for loan approvals.
Reviewing their current loan facilities.
Conducting a lending review of your current loan facilities can potentially result in significant interest savings per year, reduced loan repayments and cut years off your mortgage. With appropriate advice and planning, you can better manage your financial outcomes.