Unlock Growth Potential: 4 Essential Steps for Successful Commercial & Business Lending
Embark on the journey of understanding commercial loan refinancing, a potential game-changer for your business growth.
In the midst of the ongoing discussions about interest rates and the RBA’s decisions, the focus often gravitates towards home loans. However, the commercial loan landscape has witnessed a surge in rates, causing challenges for businesses with existing loans and complexities for those eyeing expansion and new debt.
We’ve outlined four essential steps to navigate your business through these challenging times and ensure its prosperity in the face of the highest interest rates in over a decade.
1. Refinance Your Current Debt Structure
If you already have a business or commercial loan, there are competitive rates available if you know where to look. Beyond traditional banks, alternative lenders and financial institutions offer attractive products not widely advertised. Our VERSA Finance and Lending team can assess your options, consolidating debts, streamlining repayments, and potentially securing a discount on your current interest rate to enhance cash flow.
2. Explore Debtor Financing Options
Despite a profitable business with strong sales, cash flow issues may persist in the current economic environment. Debtor/invoice financing, where a bank lends cash based on your raised sales invoice (up to 85%), could be a viable solution. This option isn’t exclusive to struggling businesses; even thriving enterprises find value in managing cash flow, especially if operations are seasonal or volatile.
3. Financing Larger Purchases Instead Of Using Cash
Consider financing for significant business investments, such as vehicles or commercial properties. Even if you have available cash, financing may prove advantageous based on your circumstances. While some assets may require partial cash contribution, financing can ease cash flow pressures. Additionally, interest on the loan for business-related assets may be tax-deductible, providing a potential reduction in your tax bill.
4. Deciding Between Secured And Unsecured Lending
Understand the distinction between secured and unsecured lending. Secured loans, backed by asset collateral, attract lower interest rates due to reduced risk for the bank. Unsecured loans, lacking asset security, carry higher interest rates. Periodically reviewing your circumstances with a finance broker may reveal opportunities to convert unsecured loans to secured ones or consolidate debt.
Get Tailored Advice From A Finance Broker
Commercial and business lending is crucial for small businesses to thrive. The VERSA Finance & Lending team stands ready to offer personalized advice, alleviating cash flow stress. Start the conversation with us for a free chat about your circumstances and explore the best financial solutions for your business.
Versa Advisory – Accountants in Melbourne
Website: https://versaadvisory.com.au
Google Map: https://www.google.com/maps?cid=15543288339898893134
Phone: (03) 9088 2433
Email: hello@versaadvisory.com.au
