There are very few Australian industries that have not been hit hard by the pandemic. Unless you sell masks and hand sanitiser, your business is probably struggling. However, some industries are definitely having a harder time than others.
The pandemic thus far has led to two lockdowns. And even though there was a break in between, during which many of us lived as if COVID-19 was on the way out, social distancing regulations and recommendations did curb our activities.
So, while restaurants have been able to pivot to takeout and catering, other industries cannot work without patrons being physically present. This is true for most golf establishments. Golf is not a sport you can play in your back garden, after all.
The good news is that golfing is becoming possible once again. It is an outdoors activity, and social distancing is not impossible. The bad news is that many golf establishments are struggling to stay open after months of little to no business.
If your golf business is struggling just to stay afloat, chances are you cannot afford new equipment. And we all know just how quickly equipment can get worn out if not repaired or replaced regularly.
This is why many business owners are looking for equipment financing. Getting a business loan in Australia could save your establishment. Here’s what you need to know.
Your first port of call is probably your bank. After all, they have been financing businesses for decades already. This leads many people to expect that they have the best products and are eminently reliable.
However, longevity can be deceptive, and in the financial sphere it usually is. Banks that have been around for decades are sometimes the worst places to get a business loan in Australia. There are a number of reasons for this.
Because big banks are so pivotal to the health of the economy, they know that even in the worst case scenario they will be kept afloat, even if that means the government needs to step in. They don’t feel the same need to keep up as smaller financial companies do.
Furthermore, boards of directors with important and influential members can take ages to facilitate any sort of evolution. In just about every big bank, there are older traditionalists making decisions. They resist change, which is why banks often seem stuck a couple of decades in the past.
Getting equipment financing from a bank therefore takes longer and requires more person-to-person engagement. You are less likely to find online solutions, although COVID-19 has caused even the most stubborn banks to offer remote options.
In the best of times, getting a business loan from a bank can be slow. Now, with companies throughout the country struggling, banks are dealing with a backlog of applications. Thousands of businesses need financing, and the process is even more of a slog.
While your loan application may be urgent, so is everyone else’s. It is not worth waiting for a bank to come through with good loan products, when there are alternatives which are as good or better.
Private equipment financing companies
If you are in dire need of a business loan, you should take a look at private equipment financing companies. Private lenders – especially Fintech companies – offer some of the best business loan products in Australia.
Private lenders offer better online solutions. They are also generally quicker than banks, providing loans immediately. When you are struggling to keep afloat, a loan that takes weeks or months to come through is not particularly useful.
The most well-reputed companies, like Prospa and Capify, offer loans of up to $300,000. They also offer low interest rates and cater specifically to small to medium enterprises in need of financing.
Are private lenders coping during COVID-19?
Private companies across the board are struggling during the pandemic. It is understandable if you are wondering whether private lenders actually have any money to lend.
The reality is that private lenders have struggled. Prospa, for example, had to write off $5.5 million recently, and make an additional $20 million available in provisions. Borrowers have been struggling to pay them back and they have had to take risks on loans to companies they know might not survive the crisis.
However, the good news is that the government has stepped in, with the Coronavirus SME Guarantee Scheme. Through this scheme, the government guarantees 50% of each loan to a small to medium-size enterprise, supporting SMEs as well as lenders.
In terms of economic growth and stability, getting equipment financing from a private lender is a very positive action to take. Having had to write off many borrowers’ debts, they need to originate new loans to survive.
The Coronavirus SME Guarantee Scheme actually ended at the end of September. However, because of the effect of the second wave and the clear need for small business loans, the scheme has now been extended to the end of July 2021.
What can you expect from a private lender?
When financing golf equipment from a private lender, you can expect an easy applications process, fast approval, and an immediate release of funds. You will also get relatively low interest rates and flexible loan terms.
However, you should be certain that you can meet the terms of the loan or you will end up with rapidly compounding interest. Being certain about anything is, of course, very difficult at the moment. The reality is that you will have to assess your business’s outlook according to the information you have right now.
No one knows if we truly have seen the worst of COVID-19. We made the mistake of prematurely reopening already, and no one wants to see a third wave that is worse than the previous two. As a business owner, you need to make the decisions that are best for your establishment as well as your patrons.
There is cause to be optimistic. With government help, lenders are confident in providing small business loans in Australia, knowing that there is no certainty that they will be repaid. We are all dealing with the lack of certainty that pervades the entire world right now. The best we can do is meet our responsibilities and take each day as it comes.