Adelaide’s commercial lending sector is hotter than ever, with Universal Finance Commercial announcing plans to expand its team and office space this year to meet demand.
Head of Sales, Andrew Pickering says, “Over the 23 years Universal Finance Commercial have been operating the commercial lending space in Adelaide has never been stronger, with more clients expanding, and needing capital, population growth and large infrastructure projects! Not one client we currently speak to is quiet and most are run off their feet.”
For many South Australian business owners, the journey to secure funding can be long and frustrating. While traditional banks and brokers often turn applicants away, Universal Finance Commercial has built its reputation of 23 years on stepping in when the answer has been no elsewhere.
“Most of our clients and referral partners nationwide have either worked with mortgage brokers or banks who don’t specialise in commercial or business funding, so they tend to spend a lot of time not understanding their requirements or needs. Often one error or miscommunication can lead to a decline and wasted time of two to three months,” Andrew explains.
He recalls a transport company that was struggling to get finance approved.
“They were behind in their ATO lodgements as they were waiting on their bookkeeper to reconcile a large amount of fuel rebates on offer. We were able to help them obtain finance to repair one of their trucks and purchase another for the busy summer harvest season.”
Another case involved a hospitality operator looking to expand after a divorce left him without property assets or savings.
“Even with these issues we could fund $500,000 between fitout finance, equipment finance and cashflow finance to allow the new location to open and start earning money,” Andrew says.
While Universal Finance offers secured private first mortgages loans starting from 7.99% p.a. Andrew stresses that the right product matters more than rate.
“We often don’t compete too much on rate once we know the solution required, as all too often clients are led by rate but are misguided to the wrong product or solution. For instance, an overdraft or line of credit at slightly higher costing might be much more suited for business cashflow instead of a traditional loan.”
The business can provide up to 75% LVR (Loan to Value Ratio) depending on a client’s circumstances.
“That is all dependent on the client’s requirements, mitigating factors like use of the funds and commercial purpose, plus how they plan to pay back the loan or exit the facility. We need to really find out how the loan is best suited to the business before defining an LVR, loan amount or term,” Andrew says.
Safeguards are also in place to prevent overextension.
“All loans go through an indicative and final assessment to ensure there is adequate measure in place for being able to service the facility, or we are able to capitalise the interest-only repayments which means that they make no payments during the term, then when refinancing or their cashflow allows they can repay the facility.”
“Shorter term loans have prepaid interest with the balance owning paid via exit strategy in place after sale of the property or refinance.”
With access to both institutional and private funds, Universal Finance is able to offer more options than in the past.
“During the last five years more capital has been made available in the commercial loan market which means clients need to partner with the correct organisation to ensure they not only obtain the correct product but also have access to ongoing support,” Andrew says.
Looking ahead, Andrew believes the sector will continue to grow.
“Since Covid-19 the commercial lending market has boomed here in South Australia and many companies have emerged as ‘specialists’ but really they were waiters or tradespeople only 12 months ago. We always stress the fact that we have been around long before Covid or even the GFC and will be around for much longer to support local businesses and clients.”
Universal Finance Commercial is also strengthening its own operations.
“We are currently expanding our team of 13 and by the end of the year should eclipse 20 with a recently upgraded office space for more room,” Andrew says.
For South Australian businesses in need of capital, there is a local team ready to find solutions when others may not.
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