Hair salon owner with credit issues approved for unsecured loan of 35K

Peter Shenouda

Thursday, 01 October 2020

Loan type: Unsecured term loan Amount: 35K Used for: Boosting cash flow and paying off debt

Like many small business owners, our client started her company with the help of family members. She was lent 35K to get her new hair salon off the ground. There with no set terms or time frames in place to repay the funds—just generous and supportive loved ones.

After operating for over a year, our client knew it was time to repay her family. Then COVID-19 happened and everything changed. While her shop remained open throughout the pandemic, business slowed down dramatically.

And while she began to navigate her ‘new normal’, our client’s goals shifted to boosting cash flow and getting ahead of COVID-19, in addition to paying off her start-up costs.

That’s when she turned to Valiant to find out more about her financing options, working closely with our Senior Working Capital Expert, Peter.

Peter took the time to understand her situation and find the right type of funding for her unique needs. After deciding on an unsecured business loan, Peter worked with both our client and her partner to secure funding with NAB, while they juggled the day-to-day running of their salon.

“Lenders can usually offer around 100% of a business’ monthly sales, so if you turnover around 35K a month, chances are you’ll be approved for 35K assuming there are no red flags or reasons otherwise to decline.”

Like many of the big banks, NAB required twelve month’s worth of transaction history, exported as CSV files within their portal. For most businesses, this means uploading not just one file, but several, which can quickly become tedious.

As a salon owner, our client makes lots of transactions in any given day, making this process even more complex. But Peter was able to do all the heavy lifting on our client’s behalf, spending hours on the phone to ensure the files were submitted successfully through NAB’s portal.

Unfortunately, the application fell through (twice) so Peter did some investigating. The second time round, an unexpected credit issue was found on the client’s account. Peter took a closer look at the full report to figure out what went wrong.

He found two things: firstly, the client had four different identities on file, and secondly, a utility default had been recorded. Peter discussed these issues with our client to better understand how he could work around them.

Once he had the information he needed, Peter turned to Get Capital, a leading non-bank lender.

“After looking at the client’s monthly turnover, I knew she had what it took to get the 35K requested. I simply needed to articulate her strength as a borrower in a way lenders would understand, so that they could see past the credit issues.”

But given the nature of unsecured lending, it’s generally harder to qualify for funds and COVID-19 added a whole new layer of complexity to the application process.

Peter wrote to Get Capital, explaining what had happened to our client previously with NAB. He also clearly expressed his view on the client as a good candidate for unsecured borrowing, despite potential red flags on paper.

Get Capital approved the full loan amount of 35K right away, and the funds were settled within one week of the client’s initial enquiry with Valiant.

The takeaway? Lending is not black and white. No two businesses are the same—in fact, we discover something new everyday in the SME space.

But stringent approval criteria—especially from bigger banks—and traditional application processes don’t cater to the vastness of SMEs we see, or consider those who mightn’t fit the profile of a traditional ‘ideal’ borrower.

“Communication between all involved is key in these situations, and taking the time to understand why something has been declined, or why something is missing,” says Peter.

“It’s not black and white, and that’s why non-bank and alternative lenders can work so well for businesses like these.”

Peter is a Working Capital Specialist here at Valiant. He's passionate about helping businesses with unique needs find alternative solutions that align with their goals.

Related Posts

Sydney’s destination yarn store approved for 100K in 1 week

Exciting growth ahead for Skein Sisters, with 100K approved in one week. Click to find out how we helped Sydney’s destination yarn store.

Hair salon owner with credit issues approved for unsecured loan of 35K

Despite credit issues on her account, this Aussie hair salon owner settled an unsecured loan of $35K in just one week. Here’s how.

Aussie nurse faces rate hike due to age: how we helped her push back

How we helped our client increase cash flow within her business, lower her interest rate and extend her loan term despite being knocked back due to her age.

New storefront and revenue stream for takeaway joint with just 10k

The Butter Chicken Shop faced huge challenges thanks to Covid, but with a term loan of 10k, we had the solution. Read the full story.

New product, extra revenue: How we helped this dairy supplier thrive

With stock drying up on supermarket shelves as a result of Covid, our client knew he needed to grow the business quickly. Here's how he did just that.

Customer Story: Back on the road to help beat Covid

After securing 60k with us, Wayne is back on the road helping Australia beat Corona. Read his story.

Customer Story: How we helped Pop Gaming kickstart growth with 50k

Don’t let a temporary cash flow issue get in the way of your business’ long-term success. Click to find out how we helped a new gaming arcade take off…

How we helped 3 inspiring female entrepreneurs grow their gigs in 2020

In the lead up to International Women’s Day, we reflected on our favourite success stories from female entrepreneurs. Here’s a glimpse into our world.

Excel Physiotherapy's Debt Consolidation Loan Changed Their Business

Valiant Finance's commercial loan team brought Excel Physiotherapy back on track with a debt consolidation loan saving them time and money on repayments.

Sweets Treats On The Road To Success

We helped Retreat Bar with an equipment finance solution that got them on-the-road with a new vehicle to reach new customers.

How Valiant Helped An Exciting Vintage Retailer Fast-Track Growth

Don't let a cash-flow gap get in the way of a growth opportunity.

Case Study: Order-In Pty Ltd expand their fleet!

Valiant helped Australian-owned catering business, Order-In Pty Ltd, find finance to buy a new van and grow their customer base.

Case Study: Mark’s Wholesale Steel Business

Finding the right business loan doesn’t have to be difficult. See how we helped Mark’s Wholesale Steel Business find the right business loan for them.

Case study: Unsecured loan to repair and register a removal truck

Here's what we did for a small business owner who needed to repair and register one of their removal trucks.

Case Study: How Valiant helped a business owner buy a drone

Here's how our Product Specialist, Graeme, helped a small business owner purchase a drone.

Making The Leap: Transitioning from PT to Gym Owner

The path from personal trainer to business owner can be both challenging and rewarding. Check out our top tips for making the transition.