Do you need extra funding to take the next step in your business strategy? We’ll help you review lenders and finance products – so you can find the best finance option for your business. #businessadvice
Every business needs finance to get the initial enterprise off the ground. You may well have entered into finance arrangements to fund the initial stages of the business, taking out loans to purchase equipment, lease premises or take on staff.
When was the last time you reviewed your finance or looked at the options for accessing other routes to funding? Are your finance facilities still offering the best interest rates and repayment terms, or are there better deals out there?
Other finance options may be available to help you fund your continuing growth, so taking a look at the current finance market is well worth thinking about.
Refinance your existing loans
It’s possible that you already have business loans in place. Sourcing that initial capital is such an important part of the startup process, and a vital stepping stone in getting your business idea operational. When was the last time you reviewed these finance arrangements? Could you, in fact, be getting a better deal?
The finance market is always evolving. New challengers will enter the market, new specialist finance products will be introduced and interest rates and repayment schedules will fluctuate and change. You may well have got a great deal on the business loans you took out five years ago – but refinancing these existing loans is likely to have multiple benefits.
You could:
- Consolidate your existing loans into one finance facility
- Lower the interest rate you’re currently paying on the loan
- Pay off your loan more quickly, to reduce the debt in the business
- Improve your cashflow position by cutting your repayment expenses
The key point here is that your business finance shouldn’t sit still. A loan is not a static debt. You can revisit and refinance your debt so it works in the best interest of the business.
Look for alternative routes to finance
Traditionally, businesses went to their bank manager when additional funds were needed. But the dynamic in the funding market has changed dramatically in recent years. Due to economic pressures, and the impact of the pandemic, the big banks have scaled back their lending to small businesses. Your high street bank is no longer the first port of call when finance is needed.
On the flipside of this, there are a growing number of alternative lenders, smaller challenger banks and specialist finance providers to choose from. And this has created a wide choice of different finance products to fit the needs of your growth plan.
- If you need new equipment, asset finance is available.
- When you have a short-term cashflow crisis, invoice finance is a good option.
- If larger premises are needed, there are commercial mortgages to consider or bridging loans to make the initial purchase while you source the full capital that’s needed..
Explore the tax deductions that are open to your business
Another element of government-back financial support is the use of tax relief. One of your major expenses as a business will be paying your tax. There are usually various tax deductions available to help you reduce your tax bill and reinvest that saved money back into your business. Careful use of these tax breaks can make a big difference to your finances.
For example, Australia has research and development (R&D) tax relief scheme. To encourage businesses to innovate and invest in R&D, the government will offer a relief against the company’s expenditure on operational R&D costs. This may result in getting an R&D Tax Offset for your company. May rules apply to this so check with us or have a look at https://www.ato.gov.au/Business/Research-and-development-tax-incentive/
Another example is the Temporary Full Expensing of assets purcashed for business purposes. Temporary full expensing supports businesses and encourages investment, as eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year it is first used or installed ready for use for a taxable purpose. More info on ATO website here
Choosing the right funding and finance will be vital to your long-term success as a business – so work closely with your advisers and think carefully about your choices.
We can recommend trusted finance brokers to assist with this process.
