Things appear to be on the ‘up’ for this financial year. Businesses are recovering after the past two tumultuous years and prospects for many are looking positive. But costs, inflation, wages in some sectors and interest rates are also on the increase. Businesses continue to face challenges which may be eased through solution-based financing.
Addressing specific problems with specific financing solutions and achieving cheaper lending rates can assist and support businesses through challenges and facilitate growth and productivity improvements. Solutions-based business financing at cheaper, more cost-effective interest rates can be achieved through a specialist broker-style lender, Jade Finance.
We address the specific needs of our business customers and proceed to source and structure financing solutions which directly addresses the pain points and work with their cash flow and anticipated turnover moving forward.
A range of targeted financing options are available to all types of businesses through our large selection of banks and non-bank lenders which we are accredited with. Targeting the financing specifically to the purpose can result in achieving more effective, positive outcomes.
Solution-based Financing Options
Our financing products and options cover a wide-range of purposes:-
- Business Overdrafts to address short-term or ongoing cash flow issues. While banks are the traditional sources for overdrafts, our non-bank lenders can be extremely competitive when it comes to rates and conditions. Offering a more attractive option for many businesses.
- Secured and Unsecured Business Loans for non-asset purchases. These are general financing options which can be utilised for a wide range of purposes which may include purchases to facilitate growth and development of the business. Business loans can be a more attractive option to an Overdraft for longer term cash flow shortfalls.
- Insurance Premium Funding is very specific financing to assist businesses to manage large insurance premiums. Rather than facing a huge premium in one payment, financing is structured to enable the amount to be paid in several instalments.
- Debtor Invoicing Finance supports businesses with customers that have long payment cycles. This is a customised solution where the business receives a percentage of the value of the invoice at the time the invoice is issued and the balance when the invoice is paid by the customer. Our lenders are extremely flexible in structuring this financing solution to best suit the business. Extremely attractive rates can be achieved which makes this a very affordable option.
- Asset Acquisition Financing facilitates the purchase of a wide range of business assets including motor vehicles, trucks, plant, machinery and general business equipment.
- Refinancing a range of loans offers the opportunity to reset the business, acquire a cheaper rated loan or restructure repayments to suit changed operating conditions.
Interest rates, financing terms and loan structure are all individually negotiated with lenders by our consultants to ensure the loan meets the objectives as specified by the business and will assist in growing the business.
Asset Acquisition Financing – Choosing the Appropriate Product
When financing cars, work vehicles, trucks and equipment, businesses have the choice of type of finance:-
- Chattel Mortgage
- Commercial Hire Purchase
- Leasing
- Rent-to-Buy (for equipment and trucks)
The features of finance products differ and this results in varying benefits being realised by the business. Selecting the option which presents the best fit with your business and your objectives, will result in the better outcome. The variations in financing products relate primarily to accounting matters so discussing the choice with your accountant is strongly advised.
There are also variations in how tax is treated and where deductions can be claimed in the selection of financing products. Some tax measures are permanent where others are introduced as temporary measures for a limited time period.
Realising a tax deduction represents a key benefit to business as it reduces the income subject to tax assessment and hence can reduce the amount of tax payable in that financial year. For financial year 2022/23 eligible business may consider temporary full expensing as a way of reducing tax.
This measure is an accelerated asset depreciation measure which allows for the full value of new assets to be deducted in the year they were acquired. Normally a new asset would be depreciated in percentages as set by the ATO over several years.
To take advantage of this measure the appropriate financing product – Chattel Mortgage, should be selected.
Being Offered Cheaper Financing Interest Rates
The primary objective when applying for business financing is to be offered the cheapest possible interest rate. With the RBA in the process of normalising rates with increases to the cash rate, lending rates are set to increase in line with RBA decisions.
Higher rates means more costs to the business. So reducing that cost is significant. The process starts with selecting a broker-style lender like Jade Finance that has the capabilities and the vital connections with many lenders. By having more choices in lenders we can source the cheapest rates and with our bargaining power, expertise and industry connections, we have the ability to negotiate with our lenders.
While we handle all that hard work, business owners can take actions to ensure they are best-placed to be offered the best rates. That involves maintaining a good credit score. Also note that the best advertised rates on asset financing apply to new goods. Used assets can attract higher rates.
There will be challenges to face in 2022/23 but with specially targeted financing solutions acquired at the cheapest interest rates, businesses may be well-equipped to proceed, progress and succeed.
Contact Jade Finance 1300 000 008 to discuss solutions-based financing for your business.
DISCLAIMER: NO LIABILITY IS ACCEPTED IF ERRORS OR MISREPRESENTATIONS ARE FOUND IN THIS ARTICLE. THE ARTICLE IS PREPARED AND PRESENTED FOR GENERAL INFORMATIVE PURPOSES AND IS NOT INTENDED TO BE THE SOLE SOURCE OF INFORMATION FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING GUIDANCE AND ADVICE SHOULD CONSULT A FINANCIAL ADVISOR.
