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Are your commercial loans up to economic challenges?
. 5 min read
With construction activity contracting and a global recession probable, assess the effectiveness of commercial loans and seek better solutions at cheaper rates. The Australian economy was the standout on the global stage with its remarkable bounce back and recovery following the peak of the pandemic. But it didn’t take long for inflation to start rising and rising and rising and the RBA to step in and hike interest rates and the outlook to deteriorate, especially globally. The Governor of the RBA, Philip Lowe has been commentating for several months on the uncertainty surrounding the global economy. This can be seen in daily finance news headlines with what is happening in the UK and the USA and as a result of the ongoing war on Ukraine. Domestically, Treasurer Chalmers says the chances of a recession on a global basis is now probable, but he does remain optimistic for Australia. Supply chains continue to disrupt many industries along with ongoing labour shortages.... Read More
Field Day Success Puts Spotlight on Farm Machinery Finance
. 5 min read
Farmers seeking cheaper farm machinery finance for equipment exhibited at recent field days are welcome to seek quotes from Business Finance Australia. The return of these great industry events after a 2 year break due to COVID, has reportedly seen a huge interest in machinery and equipment sales. The Henty Machinery Field Day (HMFD) held in September reported massive attendances and outstanding results for exhibitors. Case in particular is reported as recording good sales over the three days of the event. While many operators use these events to place orders for new machinery, others choose to weigh up the features and benefits of different models and arrange finance after the event. Then proceed to make the purchase. For potential buyers in the process of making those post-field day buying decisions, sourcing the cheapest interest rate finance could be key to realising the optimum benefits in profitability, output and productivity from the new machines. Showcase: Award-winning Machinery Buyers may be considering... Read More
The RBA announced another rise for interest rates at its October meeting which may have impacts for business finance and motivate businesses to act on acquisitions. The signs were there that the Reserve Bank Board would call for another cash rate rise in October, but the commentary has been increasing for the central bank to commence easing up on rate hikes. Governor Philip Lowe in the accompanying monthly statement acknowledged that rates had been increased substantially in a short time period. This was noted as being a factor which the Board reflected on in making the latest decision. That decision was to increase the official cash rate from 2.35% by a further 0.25% to 2.6%. This follows on from four monthly rises of 0.5% and the 0.25% increase in May. Placing the cash rate at the highest it has been in 9 years. While the October rise was less than the 50 basis points that some expected, there are strong... Read More
Cab chassis ute or light duty truck? Pros, Cons and Vehicle Finance Considerations
. 5 min read
Business Finance provides cost effective, cheaper interest rate vehicle finance for both work vehicles such as utes and cab chassis models as well as trucks. So we can handle requests and comparison quotes for businesses that are considering making the move from the ute as the main vehicle to a light duty truck as the business workhorse. While many operators will be welded onto the idea of a classic ute, others may be open to considering whether another option may deliver cost-savings, productivity gains and other benefits to the business. With costs in general on the way up, any wins in improved productivity can be welcome. Any differences in the vehicle finance will also be a top-of-mind consideration. The RBA has hiked rates over several months and most operators will be well aware of the significance of interest rates to the overall cost of finance and the monthly loan payments. So any move to a small truck from a cab... Read More
Business Finance assists businesses facing large annual insurance premiums with Insurance Premium Finance to manage expenses and ease pressure on cash flow. A finance product which may not be widely known about but can be extremely helpful for businesses as premiums on some policies rise and when businesses are looking to better manage large outgoings. The need for Insurance Premium Funding can arise due to a number of circumstances. For example, the last few years have provide great opportunities for businesses to upgrade assets with plant, machinery and equipment acquisitions. This emanated from the historic low interest rates which were available from November 2020 to May 2022 and the generous tax measures. Measures such as Instant Asset Write-off and temporary full expensing which were introduced as part of stimulus measures and provided eligible businesses with the opportunity to write-off the value of new assets in the year of acquisitions. Many businesses seized on these opportunities to upgrade and replace vehicles... Read More
Business owners may have identified the need for finance to support their operation but may not be fully across the range of commercial loans solutions available to them. Identifying the need is a first step towards achieving a workable outcome and achieving objectives. The next stage is possibly more technical in identifying which particular commercial loan will best work towards achieving the objective. That decision can be crucial in effectiveness as well as in the costs. The decision around which loan type is particularly highlighted in regard to short, medium, long term or an ongoing solution. Selecting the appropriate finance product can result in not only in a better outcome, but also possibly less interest payable and hence a reduced impost on business expenses. For example, opting for a long tem finance solution may lock the business into interest charges and repayments over an extended period, where possibly a shorter term option may be better suited. An option which may... Read More
Jobs and Skills Summit – outcomes, opportunities and options
. 5 min read
The Jobs and Skills Summit delivered positive outcomes for some businesses while others may require finance to support their operation in the shorter term. As a result of many migrant workers, temporary visa holders and international students leaving Australia in the early stages of the pandemic and not yet returning, the domestic labour market has been extremely tight. Unemployment has hit a near record low of 3.4% and the result is intense pressure on many business, constrained capacity to produce and lower production and productivity. The labour shortage has been flagged as a contributor to inflation due to the supply limitations it creates. These are issues noted by the RBA in recent monthly statements. With many businesses facing major problems recruiting staff to fill roles to enable full production, owners and operators would be looking to the Jobs and Skills Summit to deliver solutions. Solutions are clearly required to address immediate staffing issues as well as better equip the country... Read More
When rates rise, will low doc finance conditions tighten?
. 6 min read
With interest rates currently being on the rise businesses requiring low doc finance may be concerned around any tightening of conditions with higher rates. This is a specialist type of business finance, not as widely available as finance for fully documented applications and can include special conditions as requested by individual lenders. Cost-effective rates can apply but all applications are assessed individually. It can be, in simple terms, harder to get than finance for established businesses. Due to these specific features and factors, it would be only natural that in the light of the recent and ongoing RBA rate hikes, that some businesses requiring this type of finance may be concerned. Concern may exit can exist around whether this type of finance is harder to get, will attract premium interest rates and/or whether tighter and restrictive conditions may apply. We cover off on what is involved with Low Doc Business Finance, what loans are available, what business should and may... Read More
The RBA lifted the official cash rate again at its September Board meeting with the 50 basis points hike having potential implications for business finance. Businesses already feeling the effects of rising costs and labour market pressures may now be facing higher interest rates across a range of business finance products. The decision highlights the need for business owners to focus on achieving cheaper interest rates and more amenable conditions when sourcing a range of loans. The outlook for rates can be important considerations for those intending to invest in new asset acquisitions or are requiring finance to support and grow the business moving forward. The statement issued by the RBA Governor following the 6 September Board meeting offers some indication of the RBA’s rationale and intentions re further rates. Governor Lowe further elaborated on this matters and other issues in a speech delivered in Sydney on 8 September. These documents can be worth reviewing for business owners to stay... Read More
Is now the time to take on new business finance? Latest Unemployment Data
. 5 min read
With a further drop in unemployment in July and more RBA rate rises ahead, operators may have questions around timing to take on new business finance. The now 48 year record low unemployment level as of July, signals the continuing tightness in the labour market which is a key point noted by the RBA in guiding its rate decisions. The tightness of the current labour market can have impacts for interest rates but also for the business prospects. If not able to fill all its job roles, a business may not be well-placed to forecast optimum production let alone growth. We provide an overview of the latest information from the Australian Bureau of Statistics in relation to wages growth and employment and possible fall-out in regard to interest rates and business finance. The wages Unemployment at 48 Year Low The ABS release of the unemployment data series for July 2022 may send up red flags for some businesses that have... Read More
