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Small Business: Feb Finance Update

February in 2021 is a very different start to the business year for many as it signals a return not only to work post-holidays but a return to the workplace post-COVID-19. Many small businesses in CBD locations will no doubt be extremely relieved as high density office locations have suffered significantly over the past 12 months with many workers ordered to work from home.

On reflection, 2020 may have been a year of polar opposites in the small business sector. Many simply could not survive the economic impacts of COVID-19 and had to close permanently. Others thrived or at least survived, primarily as a direct result of receiving government support on a number of fronts. Some were fortunate to be presented with opportunities to implement their own innovations and pivot into the delivery of new services.

But as 2021 rolls on and much of the COVID-19 support is rolled back, small business operators will want, and in many cases need, to know their way around the finance sector for 2021. While larger organisations often have extensive assets, capital, holdings and resources in reserve, most small business don’t have that type of back-up. Ease of access to small business loans may be critical to your ongoing operations and to finance growth and expansion.

Commercial Loans For Small Businesses

Ease of access to workable small loans for businesses in Australia and financial solutions starts with acquiring a solid understanding of the finance environment. Recognising what’s available to you, from where, and staying across developments so you are ready and know where you can go to easily access cheap finance.

In this February update, we’re covering off a number of key issues currently impacting finance for businesses with a specific focus on a small business.

COVID-19 Measures: Roll Backs and Continuations

Many measures and policies which were introduced through 2020 by governments in response to the coronavirus pandemic are due to expire in early 2021.

  • JobKeeper finishes at the end of March 2021. If you require cash flow support beyond this time, we offer a range of small business loan products that may suit your requirements.
  • Business loan deferral support from banks is being wound back. During the pandemic the Federal Government put measures in place to support banks and other lenders so they could extend loan deferrals to individuals and small businesses. Those measures have now expired and at least one of our major lenders have advised us that no new loan deferral arrangements will be approved. The lenders are altering their approach from payment pause to working with customers to implement longer-term and more sustainable financial solutions. For more information click here
    If you are looking for an alternative option, speak with us about our small business loans and business finance solutions for a range of purposes.
  • Individual state governments and local councils are offering targeted support in key areas impacted by second waves and outbreaks of coronavirus. Some of this is via cash grants and others via loan schemes. If considering one of these loans, compare the interest rates and the loan conditions for organisations and terms to our portfolio of small business loans. We may be able to source you a cheaper option. Need to compare interest rates? Try our online business loan repayment calculator.
  • Special sources of startup loans for businesses are also available through government channels at different times and for different industries. Review the relevant government trade, industry, and investment department website for details here.
  • IAWO is still available through June 2022 for eligible businesses for the purchase of eligible assets. So if new equipment is on your wish list or needs list, it could be beneficial to start planning that acquisition.

    Get More Information About The Most Popular Equipment Finance On The Market – Chattel Mortgage

Most ABN holders and companies are utilising their name source of equipment financing as a Chattel Mortgage. To find more information on what is a Chattel Mortgage?

Interest Rates At Historical Low 

Good news all round on the interest rate scene. RBA is still maintaining cheap interest rates for business loans kept the official cash rate at the current historic low rate which means exceptionally cheap interest rates on a range of business loans with rates vary across different types of commercial finance for all types and sizes of businesses so you need to do your research as to which is the best loan for your small business.

Small Business Loans Market Update

While small businesses are differentiated in some respects from larger operations, they are still eligible to apply for the full portfolio of finance for businesses or commercial loans for asset acquisitions: Chattel Mortgage, Commercial equipment leasing, CHP for and Rent-to-Own.

Suitability of different loans and meeting the lender criteria can in some cases depend on the trading status of the business. For some business finance categories such as equipment finance, many banks will often require a business to have been operating for a minimum of 12-18 months. For specialist small business loans from around $5,000, the trading time can be as little as 6 months. Get more information here

In some circles, small businesses and startup businesses are grouped into one category and singled out for special loan types, often with strict criteria. But we are well across the small business scene and fully appreciate that not all small businesses are starting up or are they all in need of special loans.

  • Existing small businesses which have been trading for a time to meet our lender criteria can apply for our full portfolio of business loans.
  • For those businesses that are new or just starting, we offer a range of startup business loans. Operators in this situation often require our low docs and no docs small business loans. We can source these loans for a range of purposes and within our commercial loans portfolio.

Moving Forward

From a general economic outlook, keep an eye on the jobs and GDP figures and towards the Federal Budget in May to see what, if any, additional tax cuts or other measures will be introduced. In the meantime, if you require small business financing or startup business loans, contact us to discuss how we can assist with a workable solution.

To discuss your loan requirements contact us on 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 FINANCIAL DECISIONS. THOSE THAT CONSIDER THEY REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS.

 

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