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Finance for Small to Medium Business
 

Finance for Small to Medium Business

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    Finance for Small to Medium Business Finance for Small to Medium Business Presentation Transcript

    • By Brandon CHUAH www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success www.finx.com.au
    • www.finx.com.au Topics Covered today
      • Types of Business Finance Available
      • Lender requirements
      • How to Present your finance proposal
      • Benefits of going direct to your Bank
      • Benefits of using a Finance Broker
      FINANCE ESPLANADE   Integrity . Service . Success www.finx.com.au
    • www.finx.com.au
      • It is important that you get the correct type of loan to meet your funding requirements.
      • Funding long term asset purchases using short term funding (Overdrafts or Lines of Credits ) could lead to lenders wanting to review your facility as being a hard core debt.
      • Long term funding facilities for short term purchases can have a negative impact on day to day cashflow of the business.
      FINANCE ESPLANADE   Integrity . Service . Success www.finx.com.au
    • www.finx.com.au
      • Business Term Loans
      • Business Lines of Credit/ Overdrafts
      • Equipment Finance
      • (Leasing and Hire Purchase)
      • Agri-Business- Farm lending
      • Development Finance (construction)
      www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
    • www.finx.com.au
      • Longer term funding requirements
      • eg Purchase Factory
      • Business Loans generally are for a Maximum term of 15 years
      • Interest Only periods usually available for up to 5 Years
      • Set regular monthly or quarterly loan repayments
      www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
    • www.finx.com.au
      • Short term finance
      • Working capital
      • Funding day to day running
      • of the business
      • Most expense in terms of interest rates
      www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
    • www.finx.com.au
      • 2) Medium term finance
      • Usually 3 to 10 years term
      • Loan purpose : finance equipment,
        • business expansion, development of new products etc.
      • 3) Long term finance
      • More than 10 years
      • Loan purpose : purchase land, buildings, plant and machinery, business or franchise
      www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Overdraft / Line of Credit
      • Shorter term funding requirements to meet working capital requirements
      • Peaks and troughs of cashflow
      • Usually no monthly payment requirements as long as facility is within the approved funding limit
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Debtor finance
      • Provides cash advance to business against credit sales.
      • Loan is “repaid” when debtors pays the invoice
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Debtor finance (ctn…)
      • Fee structure :
        • Management fee – 0.75 – 2% of invoices received
        • Discounting Fee – Interest charged on the money advanced, plus fees.
        • Arrangement Fee – One off fee to cover legal charges, setup fee and government charges
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Equipment Finance
      • Tax effective lending for business equipment that has a limited lifespan (usually up to 5 Years)
      • Funding allows business equipment and vehicles to be renewed on a regular basis.
      • Do not pay the full up front cost for the asset. Reduces impact on cashflow.
      • The asset being purchased is the security.
      • Usually has a residual debt to be paid out from the sale of the asset at the expiry of the contract term
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Hire Purchase
      • The financier will purchase the asset and hire it back to the customer for a period of time.
      • At the end of the contract, the customer will take ownership of the asset.
      • Tax deduction is available if the asset is used for business purpose.
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Leasing
      • Customer will enter into rental agreement with financier.
      • Financier is the legal owner.
      • At the end of the lease term, customer will have the option whether to purchase the asset from financier at residual value.
      • Rental payments can be claim as full deduction .
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Specialised lending for Farming and Agriculture
      • Primary production income required to fund these loans.
      • Farming land is usually the primary security.
      • Many Lenders have business units that cater for farm lending
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Construction or Land subdivision
      • Project Specific
      • Buy, build/subdivide, sell and clear debt.
      • Viability of the Project, experience of the developer and presales are all important to the success of the project, as is the developers financial capacity to handle unexpected cost blowouts etc.
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Comprehensive Business Plan
      • - incorporates the following:
        • Business Acumen
        • Areas of specialty (what is your businesses point of difference)
        • SWOT Analysis
        • Marketing initiatives
        • Competitor analysis
        • Expansion/growth plans
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Financial data
        • 2 Years Taxation Returns for Business and individual Directors
        • Cashflow Forecasts (particularly for New Businesses)
        • Up to date BAS statements or Management accounts (Quickbooks, MYOB or similar)
        • Statement of financial position (Assets and Liabilities)
        • Security offered
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Be transparent. Tell the Broker/ Lender the full picture.
      • Provide all information as highlighted earlier (full financial data, business plans, Bank statements etc)
      • Be confident and sell yourself and your business. It is important the lender has confidence in your management ability and skills to run the business successfully.
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Bank direct
      • VS
      • Finance Broker
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Relationship with local Manager
      • You know the Bank and have rapport
      • But
      • you do get their off the shelf price, whether good or bad
      • What happens if they do not approve the finance
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Access to all Lenders in the market
      • Determine which loan package will be best to meet your business needs
      • Knowledge of competitive pricing offers available
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Path of least resistance with the Lenders (e.g. is Low Doc available?)
      • Saves you time by doing the leg work
      • Relationship is with your Broker who liaises with the Lender
      • Usually the Lender pays the broker a commission so the service is free to you.
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Residential finance
      • Commercial finance
      • Personal finance
      • Bookkeeping
      www.finx.com.au What services we provide : www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
      • Follow through the whole finance application
      • Listen and understand your needs
      • Provide you professional advises
      • Save you time
      • FREE service!
      www.finx.com.au www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success
    • www.finx.com.au END BrandonC@finx.com.auMob: 0433989177 www.finx.com.au FINANCE ESPLANADE   Integrity . Service . Success