The Victoria-based short-term business lender has announced that it is now funding business loans to all Melbourne and Victorian businesses with no repayments for up to 10 months, if necessary, given the ongoing lockdown restrictions affecting the state.
The lender said it would fund “any type of legitimate business” urgently requiring between $20,000 to $2,000,000 – as all loans need to be secured against real estate.
According to HomeSec CEO Paul Stone, the measure has been taken after the lender identified a “major credit crisis” happening in Melbourne, with businesses that have been forced to close due to stage 3 and 4 shutdowns finding it hard to access finance.
As such, the lender CEO said HomeSec was “answering the call from small-business owners who have been unable to obtain finance from bank and non-bank business lenders”.
“Due to their cash flow being smashed as a result of stage 4 restrictions in Melbourne, it is difficult for so many business owners to get the finance they need,” Mr Stone said.
“This has created somewhat of a credit crisis, and at a time when business owners need access to funding more than ever.”
HomeSec Business Finance noted that many businesses were suffering due to a lack of finance options.
“Government-backed business loans are great if your business had sufficient cash flow before the COVID-19 pandemic hit,” he said.
“However, we are hearing from so many business owners saying they don’t qualify for these loans, or the loan amount on offer was not sufficient for their needs.
“There are a range of needs that have to be met at the moment. From the need to survive the closure, to the need to have funds to reopen in what we hope will be 10 days’ time, through to the need to urgently take advantage of new opportunities,” Mr Stone said.
“Without this funding, so many commercial opportunities will be missed and more small businesses will not ever reopen.”
Mr Stone added that HomeSec is also offering business loans to builders and property developers “who have been left financially stranded [by traditional lenders] due to the credit crisis”, as well as to those wishing to refurbish their business premises during the forced closures.
Earlier this year, up to 800,000 bank customers deferred their repayments as part of a six-month deferral period announced by members of the Australian Banking Association under a COVID-19 support initiative.
While the ABA banks agreed to extend this support package on a case-by-case basis for customers who require it for another four months (ending no later than 31 March 2021), for most banks, this will be considered only when the current deferral is expiring.