In times of tightened bank lending conditions, many self-employed people look for alternatives.
Time is money for the self-employed. For those who do not have access to adequate funding, wasted time can lead to missed business opportunities.
The Sensis Business Index, which surveys small and medium businesses (SMB), reports in its December, 2018, outlook that access to finance continues to become more difficult.
Many self-employed people have their assets tied up in real estate, but as banks tighten business lending criteria in the wake of the Financial Services Royal Commission, cash flow can be impacted.
Obtaining finance from banks can also be slow; releasing equity even slower still.
Financial services company Maxiron Group has seen a 42 per cent increase in loan applications over the past six months, says director of operations Hugo Ng.
Maxiron has operated in the property equity release realm for 17 years and has completed more than 12,000 transactions, he says. The group utilises a network of 1600 finance brokers nationwide.
Mr Ng says clients seeking effective equity release (known in the industry as cash-out) are fed up with banks and turn to sources of finance such as Maxiron Capital for more lenient lending criteria and a faster approvals turnaround.
At the heart of Maxiron Capital’s offering is its state-of-the-art credit scoring system, iDecision, a blending of artificial and human intelligence that Mr Ng says can process a pre-qualification in 60 seconds.
The company has invested more than $1.1 million in the software, which checks against 3300 data points. Finance approval generally secures a release of funds within 24 hours, he says.
‘‘We’ve done a lot of trial and error and throughout the years iDecision has evolved into a practical system that can help self employed people and businesses to release their property equity fast,” Mr Ng says.
“iDecison reviews loan applications in real time, but our credit team still makes the final call. It’s human and machine working together.”
The company has issued loans against $2 billion worth of property – and counting, he says.
Part of the Maxiron Group is Maxiron Wealth, focusing on mortgage funds that offer investors the opportunity to diversify their portfolio.
“The funding that we offer is pooled from a wide range of investors – sophisticated investors, dads and mums, retirees, young couples – basically, anyone who wants to obtain a competitive investment return compared to term investments,” says Clifton Wong, of Maxiron’s investor relations.
He says federal Labor’s plan to scrap full tax refunds on dividend income has implications Maxiron has fully assessed.
“We are glad to say that our mortgage funds are generally not required by law to withhold tax on behalf of investors; hence, we can pay out the full unfranked return, which is a healthy advantage compared to shares.
“In addition, this mortgage fund pays out stable and regular returns and fits well with retirees’ needs.”
The advice in this article is general in nature and readers should seek their own professional advice before making any financial decisions.
‘iDecision has evolved into a practical system that can help self-employed people and businesses.’