Business Loan | New Gear for the New Year
A business loan can help your business grow!
Whether you are in the market for a new work vehicle or want to upgrade or expand your business equipment, a business loan could be the answer to your 2021 business goals! Business loans provide small businesses with the help they need to grow and see their business ideas come to life. Start the new year strong and get your business into gear.
What is a Business Loan?
A business loan is suitable for all types of entities that have an ABN. You can be a sole trader, partnership, trust or have a company business structure. A business loan can be used to purchase any type of asset that you need to run your business. This could be a car, truck, lathe, tractor, coffee van, excavator, builders’ trailer, machinery, delivery van and the list goes on. As long as the asset being purchased is used predominately for business use then it can be financed using a business loan facility. Business loans have a low-cost interest rate and can be tailored to suit your individual business needs. Low doc business loans are a great option for businesses without up-to-date financials.
How can business finance can help grow your business?
There are many benefits of financing equipment to expand your business.
- By investing in new pieces of machinery or equipment, businesses will find that they are spending less time and money on maintenance and upkeep.
- Another benefit to upgrading equipment is that new equipment can usually be financed at a lower rate than that of a second-hand piece.
- By financing equipment, there is no initial cash outlay. This enables businesses to maintain cash flow to run their enterprise.
- There are also tax incentives. Both the GST on the purchase price as well as the interest payments on the loan are both claimable. The ATO is also still offering an instant asset write-off. This allows businesses to immediately write-off the cost of assets that are less than the current instant asset write-off threshold. This means you can claim a tax deduction for the purchase cost in the year the asset is first used or installed ready for use.
- Equipment Finance can be helpful for businesses to increase productivity. For example, a landscaping business who invests in a bigger truck with a low doc truck loan, will be able to load up more gear to tackle bigger jobs, or multiple jobs in one trip. By helping businesses to increase productivity, we are also helping them to increase their revenue and increase profit!
What can be purchased with a business loan?
Any piece of equipment that is used to generate income for your business can be financed using a business loan.
Cars – business vehicle finance includes work cars, tradie utes, ride share vehicles, delivery vans and custom coffee vans. The car must be used for work related purposes to generate income. Driving your car to and from work is not considered income generating. No doc car loans and low doc car loans are a very popular finance option for small businesses wanting to upgrade their vehicles.
Trucks – all shapes, sizes and configuration from refrigerated vans, buses, car and livestock carriers to heavy freight vehicles, including rigid to tri-axel trailers. Truck finance also includes any trailering equipment that you require to pull behind your truck.
Equipment and machinery – from farming equipment such as tractors and harvesters to earth moving equipment like excavators and bull dozers to factory and industrial equipment such as forklifts and lathes.
On-Site Accommodation – camper trailers and caravans can be financed using a business loan facility if required for accommodation. For example, a rural fencing contractor working in remote locations. Another common example is trade persons working in flood or cyclone affected areas where accommodation is limited.
Office Equipment – can include POS payment systems and IT equipment such as computers and screens.
What are the types of business loans?
A business loan is also called a chattel mortgage. The chattel is the asset being purchased and the mortgage is the loan using the asset as security. There are 3 types of business loans.
1. No doc business loan
2. Low doc business loan
3. Full doc business loan
The major difference between these business loan types is the amount of documentation required by the lender to prove income. A business running for several years that is GST registered with the director/s being homeowners will more than likely be able to utilise a no doc or low doc business loan facility. In this scenario the lender has confidence that the business has been successfully operating and will continue to do so into the future. On the other hand, a relatively new business will be required to supply documentation to prove income.
Each business has its own individual circumstances, and each lender has its own lending criteria. This is where an experience finance broker can save you time, money and protect your credit file from unnecessary finance enquires.
Why use AAA Finance?
With over 95 years combined experience our finance experts know what they are doing, and they do it very well. We have over 40 different lenders so no matter what the scenario we will have a lender to suit. Having such a vast array of lenders also means that you get the best deal for your individual circumstances. One size does not fit all, and it is our job to know which lenders will fit your scenario, and of these, which ones will have the best terms and most competitive interest rate. Make 2021 the year you make your business ideas come to life.
If you have any questions or would like to discuss your business needs with a finance expert, contact AAA Finance today on 07 5493 1222.
About the author
Peter Watman has extensive finance and automotive experience having worked in both industries for over 30 years. Peter founded AAA Finance and Insurance in 2012. He leads an experienced team that provides quick and easy finance solutions along with exceptional customer service.