Starting a small business?
Are you considering buying or starting a business? Congratulations!
Small-to-medium sized businesses are the backbone of the Australian economy, contributing more than half of the nation’s GDP. They also employ millions of people and are great innovators.
… Plus when you run your own business, you get to be your own boss!
But poor cash flow and lack of capital can be reasons why many of these businesses fall over within the first few years. In fact, a whopping 60 percent of start-ups fail, usually because they don’t have a solid plan in place, or adequate business funding.
So many solopreneurs and entrepreneurs go into business borrowing money from family or friends, or using their personal assets as equity. This is not always a wise strategy.
Securing a business loan
This is where a business loan can help. A business loan is different from a mortgage and different interest rates and finance structures apply, depending on whether you’re a sole trader, a partnership, a company or a trust.
Some business loans can be unsecured – meaning you don’t need to put up equity or capital yourself, but these are more expensive. It really depends what your business needs.
To secure business finance you need to have registered your business with the Federal Government. business. You also need a solid plan and detailed financial budgeting and forecasting. At Simplify Finance, we can help you to put together all the information the lenders require to assess your application, and we can help with some professional advice – after all we’re a small, growing business to.
We can also help you to access capital if you’ve had a growth spurt and it’s time to expand. Perhaps you need to take on more staff, or upgrade your technology and systems or purchase more stock. You can get a short-term loan or a longer-term loan, depending on your needs.
Using your Self-Managed Super Fund to assist your business growth.
Many small businesses choose to use their SMSF to buy commercial premises and this can be a worthwhile strategy, so long as you’re confident you can manage your own superannuation, and that buying property for your business is a good long-term strategy in line with your business growth and goals.
Lenders can have strict guidelines when it comes to providing financing for property purchases through an SMSF. That’s because your Superannuation is intended to fund your retirement, so you need to prove that your property is a necessary business acquisition, and will stack up as a solid long-term investment, capable of delivering returns that will hold you in good stead when the time comes for you to stop working.
Find the right financial partner
It is definitely worthwhile shopping around. Businesses really benefit from finding a lender who is willing to partner with them for the long term, and who is both committed to the business vision and understands the ups and downs of the early years. A lender who is flexible and easy to communicate with. We can help you find the right match.
When you’re ready to talk business finance, give us a call.