The start of the new financial year is a far more significant ‘new year’ for the business community than the start of the calendar year. 1 July means a lot more to business operators than 1 January, when many could possibly be relaxing on holidays. 1 July is a time to get seriously involved in many aspects of the business. 2021 has additional significance, due to ongoing risks and threats to operations presented by the coronavirus pandemic. While Australia has done extremely well in economic terms re the pandemic, ongoing outbreaks and snaps lockdowns are constant reminders of the lurking risks.
Astute business owners will be taking time out mid-year to assess their finance requirements moving forward. Growing a business can involve investing and that involves sourcing cost-effective commercial finance. But not all business investments involve the purchase of equipment, plant or physical assets. There are non-tangible purchases to be made in order to affect business expansion. We explain the cheap business loan options currently available.
Acquiring Assets: Loans for equipment, motor vehicles, trucks
Key Government stimulus measures have been directed towards businesses acquiring new assets in the form of equipment, machinery, vehicles etc. Many businesses have been motivated to invest in new equipment by the tax benefits to be realised through these measures. Specifically, all eyes have been on Chattel Mortgage as the most suitable commercial finance facility for the key measures of temporary full expensing and Instant Asset Write-Off.
But the format of Chattel Mortgage does not suit every business. While not suited to accelerated asset depreciation schemes, there are other commercial loan formats available for the purchase of equipment.
The full selection of asset acquisition commercial finance products includes:
- Rental or Rent to Own
- Commercial Hire Purchase
- Chattel Mortgage for businesses
All these loan types can be used for purchasing equipment, trucks, cars, vehicles, plant and machinery. All offer a form of tax deduction and all can be secured at cheap business loans interest rates through the right lender.
Banks and non-bank lenders offer most if not all these commercial loans but the interest rates, terms and conditions will vary from lender to lender. Interest rates also vary across the range of loans. Refer to our Business Loan Interest Rate Comparison Tool to see the current deals which can be achieved across the commercial loan market.
These loans are all based on a secured finance structure where the asset being purchased is accepted as security by the lender. While ownership of the asset varies with loan types, each provides the borrower with immediate access to and possession of the equipment. The borrower is then responsible for the costs associated with the running and operation of the equipment.
To make equipment acquisition more affordable, loans can be structured through suitable lenders to include ancillary expenses associated with the purchase. That may include delivery, installation and commissioning.
Support for Marketing, Product Development, Innovation and Other Business Initiatives
General-purpose commercial loans are available for investment into areas of the business that do not involve purchasing physical equipment. The purposes can be wide-ranging and include product and innovation development, implementing large-scale business development and marketing plans and funding other expansion and growth plans.
Secured Business Loans and Unsecured Business Loans are suited to these types of business expenditure. The security may come from the purchase or of assets or property owned by the business or the business owners.
These types of commercial loans are versatile and can be secured at cheap interest rates from specialist lenders. To get a better idea, head over and use our business financing repayment calculator to compare the current best commerical lending options.
Business Cash Flow Maintenance
If you struggled with cash flow problems over the past year or at any time in the past, then now could be the time to address that issue with a more permanent solution. An overdraft is a popular form of commercial loan for this purpose and banks the popular lender to approach. But banks can have strict guidelines in regard to this type of finance.
We have connections with non-bank lenders that offer highly competitive Business Overdrafts. The format is similar to a bank overdraft except that the finance is provided by a non-bank lender.
Speed Up Customer Payments
One aspect of running a business that can be a major and ongoing problem is getting paid for work completed. While EFT and online shopping have made payment of invoices much faster than with old-style cheques and other processes, there are still many in the business-to-business sector that have to deal with slow payers.
If you find your problems stem from your customers and you don’t want to stop supplying to their businesses, consider the commercial loan product known as Business Invoice Debtor Finance. This finance is individually structured to suit the requirements and allows businesses to get a percentage of the invoice value paid at the time of invoicing. The balance is paid when the customer pays the invoice in full to the lender. A reliable payment system all for a small fee and interest charged on the outstanding funds only.
Why wait another year, another quarter or another month to improve your business financial position. Connect with Business Finance so we can connect you with lenders that can offer tailored commercial loan solutions to get your new financial year off to a great start.
To discuss your commercial loan requirements contact 1300 000 033
DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS