document.write('<table width="100%" border="0" cellpadding="0" cellspacing="0">');
	document.write('<tr>	<td valign=top width=470><h2>Applying for Business Loans</h2>	<p><i>Update for September, 2010</i>	<br><h4>Introduction</h4><p>This article considers the legal basics of getting a small business loan. For this discussion&#44; it will be assumed that the loan is to either start a new business or to buy an existing one. A business loan should also be distinguished from a "line of credit" or an "overdraft"&#44; which are generally used to address liquidity issues for an existing business.</p><p>While matters such as the loan interest rate&#44; size of the principal and term are essentially commercial questions for the borrower&#44; a small business loan will almost always be more attractive to a lender if it is secured in some way. Accordingly&#44; legal advice is of great assistance to understanding your loan and security obligations.</p><h4>Basics</h4><p>It is likely that your bank or lending institution will view a business loan used to fund a new business as a somewhat risky venture. Although you may have banked as a consumer with the lender for some period of time&#44; financing a new business creates the possibility that the borrower may be unable to repay the loan (known as "defaulting"). As the probability of the lender being repaid is directly linked to the success (or failure) of the business&#44; you should expect the lender to be very interested in how well you have planned your business and what you will do to cover the possibility that the business may have difficulty repaying. Most business loan applications require detailed information on the business\' marketing&#44; expected growth&#44; operating plans and your previous experience in the commercial world.</p><p>It is therefore important to have considered many basic questions regarding business structuring before applying for finance. As the business operates in a separate way to your ordinary finances&#44; many new business owners choose to establish a company to trade through. This is not essential&#44; but does (at the very least) help to reinforce the separate legal status of the business. A lawyer will also be able to advise on other alternative structures (such as a partnership or corporate trust). This is not to say that operating as a sole trader is undesirable in the lender\'s view&#44; but it is important to demonstrate that you have considered how the business will be constituted.</p><h4>Security for the Loan</h4><p>"Security" refers to assets (or monies) that the lender can use to secure the borrower\'s obligations under the loan. Again&#44; the form of security the lender may require can vary depending on the business\' structure&#44; but may include:<br /></p><ul><li>For a sole trader&#44; requiring the borrower to mortgage an existing asset (such as the family home); or</li><li>For a company&#44; giving the lender a bill of sale or a fixed and/or floating charge over the company\'s assets (together with personal guarantees given by the company director(s)).</li></ul><p>It is vital to get a solid legal understanding of exactly what security interest the lender is acquiring under the loan. For example&#44; a fixed charge may permit the lender to sell a particular asset if the borrower defaults on the loan (even if the sale of that asset would prove disastrous for the business). Alternatively&#44; if the business mainly has trading stock (such as goods or supplies)&#44; a floating charge may achieve the same result.</p><h4>Documentation</h4><p>Once the lender has approved the loan&#44; it will draw up documentation consisting of:<br /></p><ul><li>The loan schedule (or terms sheet)&#44; which will outline the commercial details of the loan (such as the interest rate&#44; term and key dates);</li><li>The lender\'s standard terms and conditions (which will likely not be negotiable when dealing with a large lending institution); and</li><li>Any relevant security the lender is taking&#44; together with legal documentation necessary to give effect to the security.</li></ul><h4>Conclusion</h4><p>Although the success of the business is up to you&#44; it pays to be careful when considering a business loan. Having a lawyer\'s advice to understand your loan obligations gives you one less thing to worry about&#44; instead letting you focus on getting your business going. Additionally&#44; a lender will typically require a borrower to show that it has obtained independent legal advice if a guarantee is involved (as guarantors have been able to avoid their obligations by demonstrating that they did not understand what they were agreeing to).</p></td>	<td width=10>	</td>	<td width=220 valign=top>	<table border=1 cellpadding=2 cellspacing=0 bordercolor=#263132>	<tr>	<td align=center class=formheading>Previous Months</td></tr><tr>	<td><a href="businesslawnewsletter.asp?docID=5643">Tax Time - Record Keeping</a>	<p><i>August, 2010</i><h4>Introduction</h4><p>With the end of the financial year&#44; now is the time for many people to start afresh and get their businesses in order....</td></tr><tr>	<td><a href="businesslawnewsletter.asp?docID=5623">When is the Price Right: Predatory Pricing and Small Businesses</a>	<p><i>July, 2010</i><p><em>&#34;Let\'s hear it for the little guy.&#34; &#34;Underdog.&#34; &#34;Small fish in a big pond.&#34; &#34;It\'s not the size of the dog in the flight but the size of the fight in the dog....</td></tr><tr>	<td><a href="businesslawnewsletter.asp?docID=5361">Small Business and the 2010 Budget</a>	<p><i>June, 2010</i><p>Several proposed legislative changes from the 2010 budget will have an impact on small businesses. 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There are two ways of doing this:</p><ul><li>applying to the Australian Securities and Investments Commission (ASIC) to voluntarily deregister the company; or</li><li>a members\' voluntary "winding up" (closing down) of a solvent company....</td></tr><tr>	<td><a href="businesslawnewsletter.asp?docID=4741">A Small Feat: Parental Leave and Small Businesses</a>	<p><i>January, 2010</i><p>Parental leave&#44; whether paid or unpaid&#44; maternity or paternity&#44; is an important issue within small businesses. Especially in light of the Government Paid Parental Leave 2010 scheme....</td></tr><tr>	<td><a href="businesslawnewsletter.asp?docID=4525">Small Business and The Fair Work Act (2009)</a>	<p><i>December, 2009</i><p>Replacing "Work Choices"&#44; <em>The Fair Work Act 2009</em> came into effect on 1 July 2009. Provisions relating to the National Employment Standards and Modern Awards will come into effect on 1 January 2010....</td></tr><tr>	<td><a href="businesslawnewsletter.asp?docID=4407">Running a Small Business &ndash; Why good advice pays for itself</a>	<p><i>November, 2009</i><p></p><h3>THE PROBLEM</h3><p>As a small business owner&#44; it&#8217;s not unusual to encounter situations when the burden of a legal problem or paperwork creates stress and a desire to quickly remove the issue....</td></tr><tr>	<td><a href="businesslawnewsletter.asp?docID=4245">Government Responds to Crisis with Resources for Small Business</a>	<p><i>October, 2009</i><p>The Federal government has responded to the current global financial crisis in a variety of ways. Several of these measures are aimed at small business....</td></tr><tr>	<td><a href="businesslawnewsletter.asp?docID=4149">Is your business True Blue?</a>	<p><i>September, 2009</i><p>"Made in Australia". "Product of Australia". "Australian Made". Does your business make these claims&#44; and more importantly&#44; can your business <em>legally</em> make these claims?</p><h2>The law</h2><p>Rules for country of origin representations have been in effect since 1998&#44; covering labelling&#44; packaging&#44; logos and advertising....</td></tr>');
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