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Answer

It has become more prevalent in recent times to carefully assess business risks and from a operator's perspective limit the risk to the immediate business assets.

Proprietors are no longer willing to simply offer guarantees with supporting collateral securities over houses, investment properties and other similar assets. It has become more common to limit the extent of collateral securities to a specified sum that is necessary to fulfil the lender's funding criteria.

We also advise clients it is important, should a family trust or other entity be called upon, to offer security securing a trading entities funding. Such as a family trust essentially acts as a banker to the company and should receive security from the company as consideration for the securities it is offering.

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