Secured Loan Agreements are exactly that, Loan Agreements that are secured against either the assets of a business, or directly to the item being financed. These loans are particularly useful for Investors making an investment into a business to increase cashflow or for the purchase of additional capital equipment, or additionally used by a business owner injecting finances into their own business for similar purposes.
The unique aspect of using a Secured Loan Agreement is that the loans are fully secured providing the Investor or Business Owner exactly the same protection as the banks should there be a future financial issue.
Loan Agreements for All Circumstances
Debt Prevention Strategies
Hi, welcome to CCA OR Collection Consultancy Australia and today we are going to discuss one of our Loan Agreements, in particular, our Secured Loan Agreement. Now a Secured Loan Agreement is ideal for an investor making an investment into a business to increase cashflow, for the purchase of additional capital equipment, or additionally when being used by a business owner injecting finances into their own business for similar purposes. No matter what the case, no matter what the circumstances of the loan, the main emphasis of a Secured Loan Agreement is to provide the same security as the banks when they extend credit for a car loan. This is generally done using the PPSA or Personal Property Securities Act Legislation and its accompanying register, the PPSR or Personal Property Securities Register.
Now we do have other videos on the PPSA or Personal Property Securities Act which shows exactly how the PPSR or Personal Property Securities Register works, but essentially when you use a Secured Loan Agreement to extend credit to a business, you can secure that credit on the PPSR or Personal Property Securities Register giving you the same protection as the banks.
This security interest can take two forms. First an Investor or Business Owner can register a general security interest over the entire business being financed locking in the total assets of the business as the loan security, or alternatively an Investor or Business Owner can link their security to a specific piece of equipment or machinery. This ensures that a potential Investor or Business Owner can maintain ownership of a specific of machinery or equipment more commonly known as a PMSI or Personal Money Security Interest, in case of a future financial difficulties and default in payment.
When it comes to establishing the Secured Loan Agreement on the Investor or Business Owners behalf, the process is reasonably straightforward, but as with any Loan Agreement there are several variables. The first would be the entities involved in the Secured Loan Agreement. Quite often these entities will be dependent on the particulars of the specific loan requirements and can vary but traditional range from Individuals to business, companies or Trusts. The details of which are important when it comes top the Loan Establishment process. The second variable would of course be interest rate, this includes if a potential Investor or Business Owner is going to charge an interest rate and what that interest rate might be. An Investor or Business Owner might elect not to charge any interest rate or alternatively decide instead to charge a flat fee. It is totally up to the Investor or Business Owner extending the credit.
Another variable would be the costs. An Investor or Business Owner may decide to include the Secured Loan Agreement establishment costs into the loan itself, that way minimising any upfront costs to the borrower, and instead spreading the establishment costs out over the period of the loan agreement.
Another variable might be the inclusion of a balloon payment at the end of the loan period thereby reducing the monthly loan payments. It is totally up to the parties involved to decide on how they want the loan established.
Direct Debits, or direct debiting the loan repayments from the borrower’s bank account is another way of trying to ensure the loan progresses smoothly over the period of the loan and helps eliminate defaults in loan repayments which can be debited on a weekly, fortnightly, or monthly basis.
The use of electronic signatures when setting up the loan agreement means that all parties can sign the loan documentation easily on any smart phone or tablet which helps dramatically with the initial setup on the loan documentation.
Once an Investor or Business Owner has finalised the Loan particulars, the main benefit in choosing a Secured Loan Agreement through CCA or Collection Consultancy Australia, excluding the fact that the Investor or Business Owner has the flexibility of having any loan repayments direct debited from the borrowers account, or the fact that an Investor or Business Owner can, if required, register a Security Interest through the PPSR OR Personal Property Securities Register over the loan, resulting in exactly the same protection as the banks, CCA or Collection Consultancy Australia also supply the Investor or Business Owner with a Secured Loan Agreement Management Dashboard.
Our Secured Loan Agreement Management Dashboard provides the Investor or Business Owner direct access to their Secured Loan Agreement, which you can log into at any time, available 24/7. This is where an Investor or Business Owner can view all loan repayments, including which payments have been made and which are still outstanding. The Investor or Business Owner will even receive automated notifications of any defaults in loan repayments by the borrower. Our Secured Loan Agreement Management Dashboard is the centre piece of your loan management functionality with various other options available.
The Secured Loan Agreement Management Dashboard is where the Investor or Business Owner can adjust the Loan, including the loan amount, the loan period, and even top up the loan if required. An Investor or Business Owner can simply renegotiate the loan with the borrower. They might decide to extend the loan period which can be done through the Secured Loan Agreement Management Dashboard, in which case a new loan agreement would just automatically start. An Investor or Business Owner can even defer payments by adding additional payment onto the end of the loan term, or alternatively forgive or cancel the loan. It is totally up to the parties involved.
So having a Secured Loan Agreement Management Dashboard provides complete flexibility not available anywhere else.
Now the only other aspect we need to look at is your investment required by an Investor or Business Owner to establish a Secured Loan Agreement, which is only four payments of $375 per Month. It’s a very small investment remembering that it is usually paid by the borrower which can be spread out over the life of the loan.