If you are a small business owner, cashflow and debt management may be some of your biggest issues. Smaller lenders now have products specifically designed to help small businesses with their cashflow.
When we talk to our small business clients, they tell us their big issues, are:
Managing cashflow can make or break a small business. Staff need to be paid, as do invoices, superannuation and other expenses. However, many small business need to wait for their own invoices to be paid before they can settle their accounts. Often, late payment of invoices, managing tax and GST payments and paying suppliers can reduce cashflow and significantly increase the stress of managing a business.
There are now many lenders who have products specifically designed to assist small businesses manage their cashflow. Debtor Finance, Selective Invoice Finance and Progress Claim Finance are some of the loan products available. These don’t rely on having property as the underlying security. Instead they use invoices and receivables as security. It means you can remove your own home from the lending equation and some of the personal risk associated with a business loan.
If you need additional equipment, vehicles or machinery to run your business better, consider an asset finance loan. This type of loan provides additional funding against plant and equipment or property, maximising the working capital available to your business.
Small business people can benefit from a ‘dual application’ if they are looking at purchasing a commercial property, which may be partially or fully secured by a residential property. One application covering both the residential and the commercial deal can be submitted together. It is assessed by a commercial lending manager and, if all of the documents are in order, may take only days to be approved.
If you have a SMSF and you are a small business owner, you may be able to purchase a commercial property in your SMSF. There are lots of rules around commercial properties in SMSFs, so make sure you get advice. As trustees, you may decide to purchase your own business premises. This can provide many benefits including control over the building maintenance and fitout. It also means you have a guaranteed rental income for as long as you run your business from the property.
There are only a few lenders now who will lend money to SMSFs so it’s important to make sure before you buy that the finances are in order. Contact Milestone Lending for more information about what you need to do to obtain SMSF finance.
If you have a goal to be debt free when you retire, then you need a debt exit strategy. Many small business people look at investment loans as a way to get valuable tax deductions. Eventually, however, you need to look at repayment strategies. Don’t leave it until you are about to sell your business and retire before you look at your debt exit strategy. Work with your financial planner to ensure your business and personal finances are set up in a way that will allow you to retire debt free.
Milestone Financial and Milestone Lending are experienced in assisting small business people with their finances. Please call us today on 02 6102 4333.
