Small business lender ScotPac is expanding its line of financing products, offering real estate and business loans in what could be a game-changer for many small business owners struggling to access finance.
The home equity loan for business owners will allow borrowers to use their home equity to buy or refinance residential property. Business owners can receive up to $ 2 million for individual properties and up to $ 4 million for multiple properties, with terms ranging from five to 30 years.
Jon Sutton, CEO of ScotPac, tells SmartCompany the products aim to fill a significant gap in the lending market as many small businesses find it difficult to access finance.
“Small business owners often struggle to secure financing for their home and business, and we also recognize that small business borrowers often use their home equity to fund their business,” says Sutton.
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In addition to home loans, ScotPac’s new product line includes a home-backed business loan that will allow SMEs to use their home equity to grow their business or refinance an existing loan.
Cash on call, designed to compete with traditional bank overdraft, will offer small businesses flexible financing as a property-backed working capital solution.
The aim of cash on call is to give businesses quick access to capital, support cash flow and cover unforeseen expenses. This financing will be in principal and interest or interest only for up to five years.
Sutton says the loans are currently being tested with a select range of brokers before launching nationwide next year.
ScotPac is using the trial to iron out details of the three new products, including interest rates, which are expected to be confirmed in the new year.
“We think this is a great initiative,” says Sutton. “This is something that we have been planning for some time and with 30 years of experience in credit to business owners, we think it was a natural product for us to move into it,” he adds. he.
ScotPac plans to offer home and business loans with cash on call to business owners in a range of different bundled options. The packages will also include existing ScotPac products, such as invoicing, trading and asset finance.
The new loan lawsuit comes after ScotPac announced its SME rebound fund earlier this month.
The $ 100 million fund will provide up to 2,000 new and existing customers with trade or trade credit facilities in the amount of between $ 50,000 and $ 1 million, for a minimum of 12 months, with no interest payable. on the loan amount for the first three months.