Industry News

RBA discusses both halting and hiking interest rates. So what’s next?

With the minutes of the RBA December meeting revealing the Board considered a larger hike and a hold, businesses may wonder what’s ahead for interest rates in 2023. Since the first of this current cycle of interest rate rises in May 2022, the RBA Board has constantly included a remark that further interest rate rise would be expected. But when delving further than the media release statement and into the more detailed minutes of the meeting, greater insights into the Board’s decision-making process is revealed. But sometimes more information is not always helpful. The December board meeting minutes detail the arguments that were discussed for returning to the earlier larger rate hikes of 0.5%, of continuing the run of 0.25% increases and holding the cash rate steady at the 2.85%. The possibility of a stop to rate rises would be good news while another large increase could put plans for acquiring assets with finance into limbo. One economics reporter described... Read More Caret Right

What the unemployment figures can mean for commercial loans decisions

Staying across the latest unemployment and other economic data may assist businesses make key decisions on commercial loans for major asset acquisitions. The labour market in Australia has been extremely tight for some time as the economy records near record low unemployment rates. The situation has meant many businesses across many industries are continuing to face issues in achieving full staffing. A scenario which is limiting their ability to operate at their full capacity and realise their full potential. These constraints can affect how business owners approach decisions to invest in new or upgrade equipment and machinery. Having some indication as to what could play out moving forward, may provide guidance as to whether the business will be well-placed to support such a major investment over the full term of the finance or not. There are a number of statistics-based resources available through a range of Government bodies and other organisations which are available for easy access. These include statistics... Read More Caret Right

RBA Continues with Interest Rates Increases

Pressure mounts on businesses to seek cheaper interest rate business and asset finance as the RBA continued increasing interest rates with its December decision. The RBA December decision to raise the cash rate again makes it the eighth consecutive increase this year. Raising the cash rate from that historic low 0.1% to the now 3.1% over those eight increases. Quite a significant amount of increases in a relatively short time. A fact which has been acknowledged by RBA Governor Philip Lowe in recent remarks and statement. The cash rate is now at its highest in around 10 years. The repercussions through lending markets has been increases in interest rates by banks and non-bank lenders. But those increases can vary across and within different loan markets and for finance applicable for different industry sectors. Taking this all into consideration along with high inflation, the tight labour market and rising costs, the importance of understanding what’s happening with interest rates and having... Read More Caret Right

Act now to beat deadline for temporary full expensing

The availability of temporary full expensing expires on 30 June 2023 and businesses are encouraged place vehicle and machinery orders now to avoid missing out. Six months ahead may seem a long way off for many businesses to address a deadline. But there is a compelling case for prompt attention to this particular issue, which we will outline along with how we can assist with suitable finance. We did provide a brief mention of this in a recent article when updating on a number of looming deadlines for business owners to note. But the benefits available through tax deductions and potentially refunds on tax already paid are so significant, temporary full expensing is worth a more urgent reminder. Reasons to Act Now There are a number of reasons why we consider that businesses should seriously consider temporary full expensing for their operation and take actions now, 6 months ahead of the expiry date. For starters, we’re entering the silly season... Read More Caret Right

Surprise unemployment fall points to more interest rates rises a certainty

A fall in unemployment in the latest ABS report raises the chances of more interest rates rises and highlights importance of cheaper rates for commercial loans. The Australian Bureau of Statistics (ABS) published the latest Job Figures last week and in a surprise to many, the unemployment rate in Australia dropped again. This time by 1% to 3.4%. The fall is being interpreted in some comments as the economy continuing to show strength and with inflation still rising, seen as further backing for another rate rise by the RBA when the Board next meets on 6 December. There may have been a glimmer of hope that the RBA would ease up on by how much it would increase the cash rate in the coming period. In remarks in an address at a business dinner following the November rate decision, Governor Lowe said that the Board had discussed the effects on households of rising prices and rising rates. There was mention... Read More Caret Right

Business Finance: tax benefit reminders, Director ID, interest rates update & details for flood victims

2022 has been full of challenges for business in general with inflationary pressures, tightness in the labour market, interest rates rising and for many, dealing with the impacts of devastating floods. While dealing with those many challenges it can be understandable that many other issues may be put on the back burner or overlooked. This general business finance article updates on deadlines for Director IDs and a key tax benefit, latest on interest rates and details for those impacted by recent floods. Director Identification Number Deadline Looms We recently posted a detailed article on Director Identification Numbers but with the deadline a week away, it’s worth another reminder as the penalties for those that do not comply can be sever. This ASIC regulation requires all directors of companies (there are some exclusions) to have an individual and unique identification number. Existing directors of companies must have their Director ID by the deadline of 30 November 2022. The process is a... Read More Caret Right

Inflation Rate for September Quarter

The ABS announced Australia’s inflation rate has reached 7.3% and this highest level since 1990 may raise concerns over interest rates for commercial loans. Concerns which are well-founded as the Reserve Bank of Australia (RBA) implements rate rises to address Australia’s soaring inflation. The release of the September Quarter CPI figures came a day after Treasurer Jim Chalmers handed down the October Budget and less than a week before the RBA Board is due to deliver its November cash rate decision. With a large amount of data and economic information for business owners to absorb and process in relevance to their own operation, we provide a summary of the ABS announcement. Information including which sectors are contributing most to rising inflation and the possible outcomes for interest rates. ABS CPI – September The Australian Bureau of Statistics published the CPI – inflation statistics, for the quarter ending 30 September on 26 October. The announcement reveals a 1.8% increase for the... Read More Caret Right

Federal Budget – Business Prospects and Options

The Federal Budget delivers little in direct relief for business costs and energy price increases but may offer operators in some sectors with opportunities. The October Budget or more precisely the mini-budget was delivered by Federal Treasurer Jim Chalmers on October 25th and has been widely assessed as having essentially no direct relief for businesses or consumers in regard to spiraling costs. In the lead-up, the Treasurer said it would be a ‘bread-and-butter’ budget and present a responsible approach to costs of living. Individuals can decide if they consider that is the case with the measures and policies included. As this is the first Albanese Government budget post-election, it delivered on some promises made during the election campaign but in the opinion of many, failed to deliver on directly reducing energy bills. The Treasurer did say this budget was a first stage as the Government was taking a longer view of resetting the national accounts, especially dealing with deficit. To... Read More Caret Right

Interest Rates Update: Latest Economic Indicators

With the RBA Board set to meet on 1 November, a number of data sets and other economic indicators have been released which may have an impact on interest rates. These are events and data which may be used by the RBA to guide cash rate decisions. The figures and trends may also influence the individual outlook and forecasts by lenders in setting their own interest rates on a range of business loans and finance. Staying across the economic indicators and statistic as released by the Australian Bureau of Statistics (ABS) can be utilised by business owners, operators and decision-makers to establish asset acquisition strategies and make other business plans. The ABS releases data covering general economic indicators such as inflation and employment as well as industry-specific data. All valuable intel for astute business operators. Employment Figures Released The rate of unemployment has been falling over recent months and the latest figures reported by the ABS reveal the rate has... Read More Caret Right

Flood support for business operators

Flood support for business in the current crisis may be available through government relief and through finance options to replace equipment and other purposes. The current flood crisis is impacting many operators in Tasmania, New South Wales and Victoria and both Queensland and South Australia may also be affected in coming weeks. The Bureau of Meteorology and authorities have warned that more heavy rain and severe weather conditions are in the forecast. We are acutely aware that many producers have lost crops which were ready for a bumper harvest, operators have lost equipment and machinery and many business owners have lost livelihoods or have had serious disruptions to businesses. Immediate relief may be sought through relevant state schemes and through the Federal Government packages. For many operators, the need will be to replace equipment which is currently under finance and/or to source finance and loans to acquire ag supplies and provide general financial support moving forward. Actions need to be... Read More Caret Right

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Our Lenders

Trusted by 60+ lenders Australia-wide

Westpac
Liberty
Automotive Financial Services
Macquarie
Finance One
Commonwealth Bank
Pepper Money
Morris
National Australia Bank
RACV
Get Capital
Prospa
Grow
Selfco Leasing
Scottish Pacific

FAQs
Business Finance FAQs

Yes, subject to the specific guidelines of individual brokers. Many brokers will offer services to all types and sizes of commercial set-ups while some may specialise in working for only some types of operations. Some brokers may also specialise in certain industry sectors or with specific financial products.

Commercial loans all offer tax deductible elements. These vary with the different products including Chattel Mortgage, Leasing, Rent to Own and Commercial Hire Purchase. Interest payments are all tax deductible. With Leasing and Rent to Own the repayments are tax deductible. With Chattel Mortgage a tax benefit is realised through depreciation.

The interest rates vary with the different funding products. Rates will change across the market with changes in the cash rate by the Reserve Bank. Rates will differ depending on the individual application and credit rating. Rates can vary for equipment in different industries. Credit providers will advertise their best rate for good credit rating applicants.

Yes. Having a current ABN is an essential requirement to be eligible for commercial funding products. Additional documentation on the financials of the operation and other details will be requested as part of the application process. If not all documents are available, ABN holders may seek No Doc or Low Doc options.

The same products apply across all industries and types of operations. But the funding offers can vary across different industry sectors for some credit products. This may occur with equipment and machinery in particular. Interest rates on equipment funding may be different from one industry to another. This may be due to risk assessment of the sector or the individual guidelines of a particular lender. Vehicle funding interest rates would be less subject to industry variations.

The type of credit product best suited to a commercial enterprise will depend on:- accounting method used; balance sheet approach; approach to tax; and financial objectives. The most popular options are Vehicle Leasing and Chattel Mortgage. Operators are advised to discuss choice of product for suitability with their accountant.

Cash flow support may be sought through an Overdraft Facility or a Secured or Unsecured Funding Option. All may be sought to support an operation with ongoing expenses to support cash flow.

New start-ups with an ABN are eligible to apply for all types of commercial loans. As most will not have all the documents for the application, they may seek No Doc and Low Doc options through specialist providers and brokers. Funding can be sought for vehicles, trucks, equipment and other purposes.

To be eligible for commercial loan, applicants must hold an ABN and identification are essential requirements. GST registration is not essential. A selection of documentation, docs, is requested. This may include tax returns, BAS returns, trading figures, bank statements, balance sheets and annual accounts.

Refinancing may be considered for many types of commercial funding arrangements. These may include asset acquisition funding, overdrafts as well as general secured and unsecured arrangements. Refinancing may be sought for a range of purposes including to achieve a lower interest rate, restructure repayment schedule or as part of a business-wide review of financials.

In general terms, any equipment which is for use in a commercial operation may be eligible for commercial funding. The ATO sets out eligibility for tax deductible asset acquisitions. The type of equipment will vary depending on the industry. It can include heavy machinery and equipment right through to general equipment such as computers, IT and photocopiers. Lenders may have their own guidelines as to what equipment they will fund.

Commercial financing is available through major and second tier banks and a wide range of non-bank lenders. Brokers offer services to assist operators to source funding to suit their requirements.

Rates are offered following an assessment of the application. The rate will be based on the credit rating of the applicant, the amount being applied for, aspects of the goods or purpose of the funding and other aspects. Rates offered vary across the lending market and are subject to the individual guidelines of the credit provider. Changes to monetary policy by the Reserve Bank can impact the interest rates market.

Features and structure of commercial loans should be assessed in relation to the accounting methods and objectives of the company. Consulting with an accountant can assist with this process. The best option is the one that suits the individual objectives and goals.

No. ABN holders and sole traders that are not incorporated are still eligible for commercial loans. Some lenders will have guidelines around application approvals. Small enterprises may seek a credit provider that accepts applications from their type of operation or seek assistance from a broker.