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How to find funding for high-risk sectors

An unfortunate truth for many business owners is that some sectors are inherently riskier than others. Whether due to market volatility, regulatory challenges or employee-injury rates, finding funding in a high-risk industry can be a daunting task. However, with the right approach and support from a commercial lender, you can secure the financing your business needs to succeed.

What are the unique challenges facing your business?

Businesses in high-risk sectors like mining, construction, hospitality, health services and security form the backbone of our economy, but they often face challenges when trying to access funding through traditional means. This may be due to:

  • Market volatility: High-risk sectors can experience massive fluctuations in demand and revenue, making it challenging to prove to lenders that you have consistent cash flow.
  • Regulatory uncertainty: Regulatory changes and compliance requirements can create uncertainty, leading to perceived instability in certain industries.
  • Limited trading history: Startups or businesses operating in niche markets might have minimal trading history, which can make it very hard to meet a bank’s lending criteria.
  • Credit history: A less-than-perfect credit history can be a big barrier when trying to get funding from traditional lenders.
  • Injury rates: Construction and forestry have high workplace deaths, while transportation and warehousing have high injury rates. Education and healthcare, on the other hand, experience high levels of non-fatal injuries and illnesses compared to other sectors.

Despite these challenges, Australian business owners in high-risk sectors can still find funding by exploring alternative financing options and partnering with commercial brokers like Nero Financial.

How to get a tailored funding solution

Operate in a high-risk sector and struggling to get funding? The answer lies in solutions that are tailored to the specific needs and challenges of your business. This requires a strategic approach that broadens your scope beyond the traditional lenders (i.e. banks):

  • Identify specialised lenders: You’ll want to find lenders who have a history of providing finance solutions for high-risk sectors. These lenders have a better understanding of how your business operates and might be able to offer more flexible terms.
  • Alternative financing options: Look beyond traditional bank loans. Explore options like private lending, peer-to-peer lending or asset-backed lending. These can be more accessible for businesses in high-risk industries.
  • Secured financing: Consider offering collateral to secure the loan. This could be business assets, real estate, plant and equipment, or other valuable items. Secured financing reduces the lender's risk and may make them more willing to approve your loan.
Working with a commercial broker

Finding the right lending solution for your business can be overwhelming – especially in high-risk sectors. This is where having a commercial broker like Nero Financial by your side can make all the difference. Our expert brokers have the experience and industry knowledge, and we can tap into our extensive network of lenders.

We will assess your business, first and foremost. One our of skilled brokers will evaluate your business's unique challenges and financial needs, then identify the most appropriate solutions that align with your goals. They will use their lender connections – especially those who understand high-risk sectors – to increase your chances of getting funded.

The experts at Nero can also negotiate on your behalf. Our brokers know how to present your business in the best possible light to lenders, and they will subsequently negotiate terms, interest rates and repayment schedules for you.

“Securing funding in high-risk sectors is definitely challenging, but it's far from impossible,” says David Crook, Managing Director at Nero Financial. “At Nero Financial we regularly support Australian business owners who operate in high-risk industries, with our network of specialised lenders being the perfect fit to help you achieve your goals.”

If you’ve struggled with getting funding for your business, our team of commercial brokers can set you on the right path – no matter what industry you operate in. Speak to the experts at Nero Financial or call us on 1300 025 949 to get started.