Move now on growth finance says independent lender

Move now on growth finance says independent lender

Despite the fact that local banks are bracing themselves for increased borrowing costs on the back of a looming credit downgrade, they and other lenders, are still actively scouting for good deals. Paragon Lending Solutions believes business owners should be looking to raise funds now to take advantage of the current opportunities.

Most business owners are sitting on their hands as they wait for the outcome of the ANC elective conference and how the markets may react to the news. In addition, many companies and individuals have chosen to move cash out of the country as they enter this period of uncertainty, rather than invest in local growth and expansion.

This deal paralysis has many lenders looking hard for new deals that can bolster internal targets as the year rushes to a close.

“There is a misconception that banks and other institutions are not open to new deals on the back of negative economic expectations. Paragon has been approached by a number of its 116 lending partners, who are actively looking for new deals. What’s more, we have seen deals approved in the last three months which would not have been considered this time last year,” says Gary Palmer, CEO of Paragon Lending Solutions.

Following the Mid-Term Budget late last month (which saw the banking shares taking the immediate brunt), banks added to the gloomy outlook by advising they expected borrowing costs to rise over the next two months on fears of a sovereign downgrade.

However, Palmer points out that many banks still have lending targets to make and, although turnaround time on decisions may still be long, business owners who were looking for growth funding should consider making application sooner rather than later.

“Individuals and companies looking to secure credit should make the most of the current quiet time being experienced at traditional and non-traditional lenders. They will be more open to deals which they may otherwise overlook. This doesn’t change their risk profile, but they will certainly have the time and attention which they may not have in busier periods,” he says.

Palmer however cautions that a large part of securing a deal depends on how it’s packaged.

“Making sure you have everything required to entice a lender is not a simple matter. Realistic forecasting, complete market analysis and the ability to customise your opportunity, based on who you are speaking to, requires expert advice. Working with a partner who has access to a network of lending institutions as well as insight into what they are looking for will make all the difference.”