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Need funding for your Supermarket business?
Here’s what you need to know.

Whether you are establishing a new supermarket or buying an existing supermarket business or looking to save money or negotiate better terms and conditions on your current business finance arrangements, the key to getting a better deal is as simple as, thinking like a bank!

Banks lend money based on two key KPIs – they want to be repaid and they want a return on their investment. In theory this is simple, however the criteria the bank will use to assess your supermarket’s business credit risk can be extensive.

More importantly, unlike the relative standard terms of a home loan, the bank or lender will allocate your business case with a risk grade which directly impacts the interest rate, fees, terms and conditions of your finance and, ultimately the profitability of your business. The higher the bank perceives your risk, the higher the cost of your loan and vice-versa.

Your experienced business finance broker will be in the best position to talk you through all the key criteria each bank or lender will use to establish your funding options and it will differ from one lender to another.

In the meantime here are just a few tips to help you prepare for a successful business finance approval process:

Ensure your financial statements are current

The lender will require copies of (including but not limited to):

• • • • Last 2 years’ Accountant prepared financial statements (for existing stores)
      • Interim management financials for current year-to-date (for existing stores)
      • Last 2 years’ full personal tax returns for directors
      • Last 2 years’ notices of assessment for directors
      • Last 3 pay slips (for any external PAYG income)

Ensure your credit history is clean

If you have any defaults on your credit file, the lender will require a full explanation and written confirmation that the default has been cleared.

Tip: You can obtain a copy of your Credit File from www.mycreditfile.com.au

Clear all outstanding tax debt

If you have any tax outstanding or a repayment arrangement with ATO, it is unlikely the lender will approve your loan and they will require a record of your last 12 months’ worth of tax transactions for company/trust and directors personally. Your accountant will be able to provide this.

Have a thorough Business Plan

The lender will require a copy of: 

• • • • Business Plan (including resumes for directors).
      • Cash flow projections (1 year for existing stores/3 years for new stores).
      • Budget showing total setup costs (for new stores).

Supermarket Finance doesn’t need to be difficult

While your bank manager or mortgage broker may have helped you with home finance previously, securing finance for a supermarket or similar retail outlet is quite specialised and it pays to find a professional finance broker with a proven track record in supermarket finance who will: 

• • • • Know immediately which lenders will be receptive to your business opportunity
      • Where possible, obtain competitive options from a range of lenders (including your existing bank) – not just one
      • Negotiate on your behalf to secure better interest rates, fees and loan conditions
      • Guide you through the loan documentation and paperwork requirements
      • Complete loan application forms and lodge the loan application on your behalf
      • Manage the settlement process in conjunction with your solicitor etc.
      • Act as a conduit between you and the lender for the life of your loan – a real person on the phone when you need them (not a call centre)

For more guidance on finding better finance for your supermarket business opportunity get in touch today.

Would you like to know more?

Contact us

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