Having ready access to credit is incredibly important for entrepreneurs, small business owners, and self-employed people alike.
Having enough funds to pay for the expansion of your business is often one of the important factors for business success. Whether you need financing for new equipment, hiring employees, or purchasing work vehicles, there is likely a range of finance options available.
The benefits of financing your expansion
Taking on a loan in order to finance the growth of your business can be a daunting prospect. Typically, you will need to take a calculated risk when you are positioning your business for growth.
The biggest advantage of using finance to expand your business is that it can allow you to grow much more quickly than if you wait until you have enough cash on-hand from your revenue alone.
Ideally, large purchases you make with financing will enable you to increase your revenue and improve the efficiency of your operations. That way, the increase in your revenue will more than pay for the cost of your loan.
Finance options for business owners
There is a wide variety of finance options for business owners. No matter what industry your business is in or what kind of assets you need financing for, there is likely a loan option that will suit your needs.
Some of the loan types available to business owners include:
- Business car loans
- Equipment loans
- Yellow good loans
For even smaller businesses such as freelancers or self-employed people, you may be able to get a business loan for things such as a new computer, expensive software licenses, or any other tools that you may need.
Car loan options for businesses
Car loans for business owners are a common finance product. These can be for vehicles used for a trade, such as utes or trucks, or for a regular car that you will use for business related travel.
Business car loan options include:
- Commercial Hire Purchase
- Chattel Mortgage
- Finance Lease
If your business is going to require a fleet of vehicles as it grows, a cost-effective way of achieving this is to offer your employees novated leases for work vehicles.
A novated lease is a three-way agreement between an employee, an employer, and a lender. This provides many benefits for both business owners and employees. Some of these include:
- Tax savings – Loan repayments for novated leases are made from the employee’s pre-tax income, allowing for income tax savings. Fringe Benefits Tax may apply.
- Choice of vehicle – Usually, employees have a choice of vehicle they want under a novated lease agreement.
- Increased remuneration – Allowing employees to get a novated lease through your business allows you to effectively increase remuneration at little or no cost to your business.
- Vehicles are ‘off balance sheet’ – Vehicles purchased under a novated lease agreement are neither an asset nor liability.
Get expert finance advice
There is a wide variety of finance products that are available for business owners. It’s important that you get advice from a finance industry professional before taking out a loan to ensure that it is suitable for your business.
Article provided by Digital360