A new financial year is akin to NYE for business. A time to reflect on the past year and put in place plans to improve, grow and develop the business over the next 12 months and beyond. Over the past few years many businesses have relied heavily on the support of state and federal government pandemic measures. With those measures now scaled back and business conditions stabilising to at least some extent, it may be timely to consider what business finance options are available to support the business moving forward.
A range of low rate business finance options including refinancing existing equipment and machinery loans are available to support and sustain businesses, to enable growth and development into the new financial year. The keys to achieving a successful outcome with finance is to select the appropriately targeted product, consider the lender options and of course, achieve the cheapest interest rate offer.
Why is the new financial year, 1 July, popular timing for refinancing and other finance decisions? Primarily businesses opt to bring in change in this area in line with the tax year as business finance products offer various tax benefits. In 2022 this is also a very good time as interest rates are on the rise as the RBA proceeds with normalising the cash rate. While rates have already increased as a result of the RBA’s May decision, we can act quickly to source new finance for business before further rises.
Refinancing to Reduce Overheads
Refinancing is a very popular way for businesses to reduce overheads by replacing existing loans with loans sourced with lower monthly repayments. This may be achieved by securing a lower interest rate, through a change of finance product or restructuring loan term and balloon.
Many types of loans can be refinanced but the process is typically more suited to loans which have a longer finance term and/or a larger loan amount such as with many types of equipment, plant and machinery.
Refinancing may also be sort midway through a loan term by businesses with No Docs, Low Docs and Bad Credit loans. Where the original loan attracted possibly strict conditions or a higher interest rate due to the nature of the business at the time of application. Through the initial stages of the finance term, the business may have improved their credit profile and acquired more documentation. As such, they may now be offered a cheaper loan.
Business Overdraft
Overdrafts are the most versatile and widely-used type of general business finance. They can be utilised for a wide range of purposes, on a short term basis or as an ongoing line of credit. The business only pays interest on the portion of finance used but has the reassurance that funds are available when required.
Traditionally banks are the go-to for overdrafts. But as the financial system in Australia has grown, more and more non-bank lenders are also offering this type of funding. We have access to non-bank lenders that offer extremely attractive interest rates for overdrafts.
Great for supporting cash flow, especially in uncertain times which the economy has experienced over the past few years. With additional challenges from rising costs and supply chain issues ahead, an overdraft may be the flexible solution to give your business breathing space.
Secured and Unsecured Business Loans
While asset finance – loans to purchase goods such as cars, trucks and equipment, is the most popularly sourced business finance, it does not suit every acquisition. With Leasing, Chattel Mortgage, Commercial Hire Purchase and Rent-to-Own, the loan is structured around the goods as security.
Investing in growth may involve the purchase or cost of other non-tangible goods and services which are not suitable for asset finance. These may include purchase and implementation of new processes and systems, training and development, consultants, R&D, website and digital systems and many others.
Secured and Unsecured Loans are general finance products which are sourced and structured to suit the purpose and the business objectives.
Specialist Finance
In addition to the more general finance products, we also offer a number of more specialised business finance options:-
- Debtor Invoice Funding: to support businesses that need to wait extended periods to receive payment from their customers. A possible consideration for businesses on progress payment contracts or 90+day payment arrangements.
- Insurance Premium Finance: to divide large insurance premiums into a number of instalments over the year.
Sourcing Cheap Interest Rate Finance
With a range of options available, businesses can discuss their objectives and requirements with our consultants and be provided with the targeted product which is designed to deliver the optimal outcome. We have provided free-to-use loan calculators and interest rate charts to assist business owners in arriving at a plan as to their requirements.
Each application is addressed individually and quotes sourced from across our vast lender panel. Our ultimate goal is to achieve the cheapest interest rate and most appropriately structured finance for our customers. Approach the new financial year with greater confidence gained through the support of cost-effective business finance solutions.
Contact Jade Finance 1300 000 008 to discuss the business finance options to meet your new financial year goals.
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.
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