If you are part of a family business, or have a business partner, it is common for lenders to sign business partners into the same loan. Let’s assume you and your business partner have each used your home mortgages to secure your business loan. If you have a joint mortgage, perhaps with your husband or wife, they will have guaranteed your business loan too, which also makes them liable for the debt. Let’s say you make all of your business loan repayments and pay off your share of the debt, if your business partner and their spouse do not make their loan repayments for one reason or another, you will both then become liable for the business partner’s debt.
Imagine if you could separate out your business loans from your home loan, and separate out your share of the loans from your business partner’s loans. This would give you financial protection and no doubt peace of mind.
It’s as important to negotiate an equitable security position as it is to negotiate suitable pricing. This is often difficult without expert help as you need to understand the intricacies of this process to be successful.
Wherever possible, we seek to have the bank separate out the loans so business partners or family members are not financially exposed to each other beyond the business loans that they share. That way, everyone is protected. In our experience, this brings clients a great sense of surety.
Here’s why a specialist business loan is a great option for you
Be independent from your business partner’s debt.
Separate your debt liability so you’re only responsible for your repayments.
Restructure your business finance to reduce repayments and increase cashflow.
Debts might be secured against commercial assets. Residential security is often cheaper and more flexible.
You may be guaranteeing other parties debt as all parties are grouped together through the business.
The banks are unlikely to inform you of better, client friendly structures that are already available to you.