We got chatting to John “JD” Davidson, who’s been leading the charge at MTF Finance New Lynn since 2010 (back when it was known as MTF - Waitakere). Since he has worked in big banks and has plenty of lending experience, we thought he’d be the right person to talk to about how loans can help your business get ahead of the competition.
Making the best assessment for your business
JD: With any customer, we need to look at their affordability, their credit profile, and whether the vehicle is going to be the right fit for them. Pretty standard stuff, and something that we've has covered on previous blogs.
With a business, it’s a pretty similar kettle of fish to lending to individuals. Are you in a financial position to borrow? Do your assets exceed your liabilities, and do you have positive asset backing? What is the cashflow of the business like? Is this vehicle going to be viable for your business? It’s a lot harder to justify a restaurateur buying a Ferrari as a “business vehicle” if they’re not currently profitable or liquid!
Financial statements give us a good indicator of the way the business is operating and its ability to service debt. As a lender, we’ve got to get a feel for the kind of business people our clients are and whether a vehicle loan is the right move for them.
We’ve also got to know that the person we’re dealing with can borrow on behalf of the organisation; a manager might be looking at getting another van, but we always make sure we are dealing with the decision makers and that there is authority to act on behalf of the business. Sounds simple, but we’ve got to protect your business and credit!
Cash isn’t always king
Even if you’ve got some or all of the cash in hand for a new asset, you may find it smarter to invest into your business and grow in other areas.
A lot of us grew up with the advice to ‘never get it on tick’, but that rule doesn’t apply the same way anymore. If you can keep your cash liquid, then you can invest it into other things like your team’s wages, or maintenance and paying bills. Having said that, a good repayment history looks great on your credit profile and can help to get future loans to expand your business and upgrade your fleet in the future.
Our lending decisions take common sense, due diligence at every stage, good experience (that comes with time), and asking a lot of questions for a business vehicle loan. Among them is whether you’re in the best position to borrow, and if it’s done for the right reasons. That’s the real guts of it all.
Finance your next vehicle through our nationwide network of MTF Finance offices or approved dealers.
Get ahead faster
I know it seems that it’s mostly balance sheets, but the fact of the matter is that there’s no quick and easy formula that we can plug your numbers into, and get a yes/no result. We take a wider look at the strength of your business as a whole, in order to know that a loan is going to be right for you - and the position it’ll put you in, to grow the business.
So much of what we do isn’t one-offs, but part of long-term relationships we have with the good people we’ve been seeing for years or decades. It helps for me because I worked with General Finance, AGC, and National Bank back in the day, which means I have a lot of experience learning the nuances of going out to deal with a business (as opposed to individuals wanting finance).
With vehicle loans, we really do get to know the people behind the business and how they operate. It makes everyone’s lives a lot easier, because we’re as invested in your business as you are, we understand what it’ll take for your business to thrive, and what can we do for you now and into the future.
We want you to borrow for the best reasons possible: to get the things you need, and help you do more.
Whether you’re a sole trader or you run a local business, we can get you moving with a loan tailored to you. Our loans help New Zealand businesses finance nearly any asset they need.
Looking for a new vehicle? Talk to one of our MTF Finance approved dealers or our MTF Finance offices.
