Tag: business finance

Buying Articles

Latest data on construction activity may create need for business finance support

. 5 min read
The August construction activity report reveals another drop in some sectors which may create a need for some operators to require business finance support. The data reveals variations in some sectors that may indicate varying prospects for different operators. Prospects which may require either general finance to support the business or asset acquisition finance to support growth. The Ai Group reports the construction activity and the August results show a third month of contraction. However, the rate of that contraction is lower than for the previous month. In addition there are increases in new orders in some areas of the market. For business owners that refer to these reports for forecasts and possible indicators for their planning purposes, the August report may have mixed outcomes. Those operating in sectors which have continued to show a fall may seek support by way of restructuring existing loans through refinancing and other solutions. Those in sectors that reveal a level of improvement may... Read More Caret Right
Buying Articles

Sole Trader Business Finance at Better Interest Rates

. 6 min read
Those in the process of planning to work for themselves in a one person operation, sourcing sole trader business finance at the cheapest possible interest rates is achievable through the right lenders. The dream or even the definite career plan for many aspirational individuals is to work for themselves. To, at some point in their working life or career, to make the transition from employee to boss. This may mean setting up as a sole trader in any number of fields such as:- contracting in the business services including tech activities, contract delivery work, construction and trade work, turning a hobby into the main income stream, establishing a beauty business, owner-driver and many others. Many of these types of businesses will require the purchase of some form of equipment and/or general financial support at least in the initial phases. Finance may actually be needed to establish the operation with the purchase of a van, truck, IT equipment, tools and possibly... Read More Caret Right
Industry News

RBA July Rate Decision – what it means for business finance

. 5 min read
After two months of significant rate rises, all eyes were on the RBA July rate decision. As predicted and pre-empted, the Reserve Bank Board lifted the cash rate by another 0.5% at its meeting on Tuesday 5 July. The RBA July rate decision sees the cash rate at 1.35% and represents a 1.25% increase in just 3 months and a wake-up call for those needing business finance. Significant increases and based on comments by Philip Lowe, Governor of the RBA, July will not be the last rate rise this year. The recent rises in the cash rate are a winding back of what the bank described as extraordinary support which was provided to stimulate the economy and returning interest rates to normal levels while addressing soaring inflation rates. Rate rise decisions by the RBA result in interest rate rises across loan markets including business finance products. Though the timing and amount of any lender rate rises will be guided by... Read More Caret Right
buying tips

Financing for Business as Interest Rates Rise

. 5 min read
After an extended period of record low interest rates through 2020 and 2021, the Australian economy is now experiencing the first rate rises in around 12 years. A scenario which will be something very new to tackle for many businesses seeking financing. As the RBA undertakes a process of normalising monetary policy and raising the cash rate businesses need to prioritise seeking the cheapest financing rates to ensure cost-effective and workable business finance is achieved. To achieve this objective, business operators can address the key factors which contribute to being offered the best interest rates. In addition, a range of options in regard to lender, finance product and finance structure can be considered to ensure the overall financing is as affordable as possible. RBA Scenario The RBA  held the cash rate at the historic 0.1% since November 2020 and consistently repeated its position as remaining patient and waiting for inflation and unemployment to be in target range to trigger a... Read More Caret Right
Industry News

Tax Effective Business Finance Options 2022/23

. 6 min read
As the new financial year gets underway, it’s opportune for businesses to review their finance options in light of current taxation measures. While a cheap interest rate is integral to cost-effective business finance, tax deductions can represent a real saving. Deductions reduce taxable income which lowers the amount of tax payable in that financial period. All forms of business finance have tax deductible elements. But the amount of the deduction and the timing in when that benefit may be realised, varies with different finance products. Deductions are subject to rulings as made by the ATO. In addition to the standard tax rulings, the Federal Government can introduce special measures, often with a timeframe, to support and assist business. Such was the situation in April 2020 when the Federal Government introduced Instant Asset Write-off as a tax measure for eligible businesses and assets as part of the COVID-19 stimulus package. This measure was amended several times later in 2020 to temporary... Read More Caret Right
Buying Articles

Restructuring Business Finance for FY21/22

. 6 min read
The end of one financial year and the start of the next can be an exceptionally busy time for most business owners and operators. You could be engaged in your own EOFY sales to generate additional income and move stock. Most will be focussed on tax issues to ensure all boxes are ticked and affairs in order before 30 June. Some will be seeking a discount at the EOFY sale events for motor vehicles and equipment. And this time of year often coincides with school holidays which can place additional demands on-time schedules. But amidst all that you have to do, it is also an appropriate time to take time to reflect on how you could set up your business for improved performance in the new financial year. Consider what tweaks you can make here and there to realise savings and generate additional income. One area worth taking a close look at is in regard to existing business loans and... Read More Caret Right
buying tips

Simple Steps to Estimating Your Business Finance Repayments

. 6 min read
To take on business finance to acquire vehicles, trucks and equipment, plant and machinery is a major consideration. Many business operators may need to prepare financial projections and cash flow forecasts to plan the acquisitions in their operational expenditure. Key personnel may need to prepare budgets and proposals detailing ROI and expected productivity and performance outcomes from the acquisition for senior management and board approval. Most business owners, especially SMEs and sole traders need to work out if they can afford the purchase. Differing purposes and objectives but with one common thread – buyers primarily need and want to know what their finance repayments maybe when acquiring major assets. They need to be able to quickly and easily convert the purchase price of the equipment or vehicle into monthly repayments for inclusion in planning documents or to rule goods in or out of their affordability range. Read more here. That process is made easy and without any high-level maths or... Read More Caret Right
Industry News

Business Finance and the Federal Budget

. 6 min read
Despite the significant coronavirus stimulus packages announced throughout 2020 and many of the measures delivered for business in the delayed 2020/21 October Budget still available, the 2021/22 Federal Budget still attracted much attention from the business community. Although a number of the measures in the Budget were pre-empted with the traditional pre-budget ‘leaks’ by the Treasurer, Prime Minister and other relevant Ministers, there was still plenty of ‘reveals’ in the official bringing down speech. To assist businesses grappling with the big numbers and to cut through to what your business may gain from the Federal Budget we have summarised the key points from our Business Finance perspective. General Overview The Treasurer, Josh Frydenberg, clearly stated prior to his Budget speech on 11 May, that this would not be an austerity budget to address the debt accumulated as a result of the stimulus measures. He said it would be a budget to repair the economy with a continuation of spending but... Read More Caret Right
buying tips

Is now a good time to buy?

. 6 min read
The decision to acquire new business assets including cars, trucks, machinery and equipment involves a whole range of steps, considerations and evaluations. Which particular make and model to the buyer? Which model will deliver the best outcome for the business? Which finance product to use? Pay a deposit or borrow the full amount? Price of the asset and the finance? An extra consideration is getting the timing spot on. Deciding when is the right time to invest in new business assets should also be a priority. Numerous aspects can be evaluated in this stage of the buying process and we have collated a range of factors and current data for your consideration. EOFY Countdown We’re now into the home stretch or sprint to the end of the current financial year. 30 June is a key date in the business calendar for many reasons but rather than focus on that date, the weeks leading up are more critical. That is time... Read More Caret Right
Industry News

Finance support for both sides of the balance sheet

. 5 min read
When balancing the books on a weekly, monthly, quarterly or annual basis, many businesses focus primarily on sorting out issues from their side of the balance sheet, their perspective. Allocating the existing bank balance to cover individual outgoings due including bills, supplier invoices, rent and wages. Many seek loans and finance to cover short term shortfalls rather than taking a holistic approach and looking at both sides of the balance sheet. We’re talking about the difference between seeking a cure so to speak rather than simply treating the symptoms. Follow us on this one as Business Finance provides commercial loan solutions which address multiple requirements for all types of businesses. Business loan interest rates vary across different finance facilities and selecting the specific loan product for that specific purpose may deliver a better outcome. Especially when that interest rate is the cheapest available. This brings in the second point to this article –lender selection. Interest rates not only vary for... Read More Caret Right

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Our Lenders

Trusted by 60+ lenders Australia-wide

Westpac
Liberty
Automotive Financial Services
Macquarie
Finance One
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.

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