Finance for a Smartline Mortgage Broker Franchise
Learn how to open a broker and compare your loan options.
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Smartline offers franchises for those looking to open a mortgage broker business, with over 300 franchises currently operating in Australia, which settle around $20 million in loans each year. It has also been voted Australia's top franchise business for eight years in a row, according to the annual topfranchise.com.au survey.
Find out how it works and how you can finance your own broker franchise today.
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What is a Smartline mortgage broker franchise?
A Smartline franchise allows those with little financial services or business experience to start and operate a mortgage broker business.
You will pay an initial franchise fee and in return receive ongoing training and marketing support. Unlike some other franchises, you do not need to cover the cost of building new premises since you can choose to operate the business from a location of your choice, such as an office or your own home.
However, while you can grow and run your business from home, Smartline requires franchisees to run their business full time. Unlike other franchise models, you do not receive a franchise for a particular territory or location and you will typically need to find your clients through referrals or your own personal network.
You do not necessarily need experience in the financial services industry to open a franchise since you will receive training upfront and during your first year of business. However, you will need to complete a Diploma of Finance and Mortgage Broking Management as part of your initial training as well as undertake the Smartline induction training.
How much does a Smartline mortgage broker franchise cost?
You will pay an initial franchise fee of $13,000 as well as an additional $6,000 for training if you do not have mortgage adviser experience.
Other costs to consider
Along with any initial and ongoing franchise fees, you will need to keep in mind the following costs when starting your franchise:
- Cost of premises. You can run your franchise from your own home, but if you choose to run your franchise from an office, you will have to pay to rent or buy the appropriate space.
- Working capital. You will need to budget for additional funding that may be required to initially set up your broker business. You may need to buy equipment, such as computers and phones, or pay for utilities, such as Internet access.
- Cost of finance. If you need to apply for finance to fund your franchise purchase, you should factor in the costs of the loan when working out your overall costs.
How to apply for a Smartline mortgage broker franchise
If you wish to apply for a Smartline franchise, you can begin by submitting an inquiry on the Smartline website. You will need to provide your contact details and indicate whether you have any previous experience. A Smartline staff member will then contact you to discuss your franchise options.
What are my finance options?
While a Smartline mortgage broker franchise has smaller upfront costs relative to other franchises, you may still need considerable funding to open and start up your business. You have a number of options when it comes to financing your franchise.
- Personal loan. Most personal loans will allow you to borrow up to $50,000, which should cover the costs of setting up a Smartline franchise. However, some lenders may not allow you to use a personal loan to fund your business, so you should always check before you apply.
- Secured business loan. If you have an asset, such as a commercial or residential property, you can use it as security against a loan and generally receive a lower interest rate. Many secured business loans will give you a loan term of up to 10 years, and some will allow you to borrow up to $1,000,000.
- Unsecured business loan. If you do not have an asset you want to use as security, you can generally borrow from $5,000 to $500,000 with an unsecured business loan. Your rate will generally be higher than on a secured loan as there is more risk for the lender.
- Business line of credit. A line of credit lets you draw from a specified credit limit when you need it. You can generally borrow up to $400,000 on an unsecured line of credit or up to 80% of the value of your asset if you choose to use it as security against the loan.
- Peer-to-peer business loan. Unlike a traditional bank loan, a peer-to-peer loan is funded by an individual or a group of investors.
How to compare finance options
Consider the following when comparing your finance options:
- Loan amount. The amount you may need to borrow will vary depending on your previous experience and current financial situation, but you should always make sure a specific loan product will allow you to borrow the amount you need.
- Interest rate. Your interest rate helps determine the size of your loan repayments, so it's important to compare your options.
- Fees and charges. You should always factor in any additional fees or charges that may apply when working out the true cost of a loan.
What to consider before applying for finance
- Eligibility criteria. Some lenders will have certain requirements that you need to meet in order to get a loan, such as a minimum turnover or trading history. If you are opening your franchise from scratch, you will not be able to meet these criteria and may instead need to provide a detailed business plan to be approved.
- Do you have any previous business experience? While you do not necessarily need previous experience running a business to open a Smartline franchise, many lenders will require you to have experience in order to be eligible for a business loan.
- Do you have an asset to use as security? You may be more likely to be approved if you have an asset that you can use as security against the loan. However, you may risk the lender taking ownership of this asset in the event that you fail to repay your loan.
- Can I afford the loan? Regardless of how much you need to borrow, you should always have an idea of how you will repay your loan and should never borrow more than you can realistically afford.
- Do I need ongoing access to finance? A line of credit loan gives you continued access to financing, provided you continue to make your repayments, and is worth considering if you will need financing down the road.
How do I apply for finance?
Once you have found a business loan that suits your needs, you can click "Go to site" on the table above and follow the instructions to begin your application.
As part of your initial application, you will need to provide personal and financial information, such as your business experience, credit history, current debts, assets and liabilities.
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