Assessing Prospects for New Fin Year? Business Cashflow Loans & Other Options

Cashflow loans may take the form of Overdrafts, Lines of Credit, Trade Loans for short-term support and Unsecured Business Loans for longer term solutions. The start of the new financial year is a popular time for many businesses to take stock and assess their prospects for the year ahead. In the current economic climate, that means taking into account high inflation rates, the prospect of further rate rises, and the possibility of further supply issues. The ceasefire between Iran and US is already shaky.

In an address to an Economists’ Conference on 8 July, Assistant Governor of the Reserve Bank Sarah Hunter discussed the issues of supply shocks and demand shocks and their implications for Monetary Policy. While complex concepts, the overall message could be an alert for businesses to be ready to sustain what may be ahead.

Are you confident with your current arrangements? Setting the business up to sustain the expected and unexpected may include ensuring the cashflow is supported with affordable finance products. As specialists in commercial credit, our objective is to support businesses with cost-effective finance across their operation. As part of your new financial year business review, consider the credit facilities that are available to support your operation.

Cashflow Loans – Short-Term

Numerous issues can create cash shortfall issues. They may come from a downturn in income from a drop in demand, an increase in operational costs, or from slow paying customers. Leaving the business with insufficient funds at hand to meet its own commitments.

Leaving bills unpaid while waiting for the cash to come in risks damaging the credit history and existing good relationships with suppliers. Issues which may result in more serious problems if the situation continues.

Where the need for additional funding is short-term or intermittent, cashflow loans with Lines of credit, trade loans and Overdrafts may offer a flexible solution. Funds are provided for the business to use when and how they are required. This can include purchasing supplies, meeting wages and other loan commitments and general operational expenses.

Interest rates are higher on these types of loans than other forms of credit. But the interest is only charged on the funds used each month. Allowing operators a level of control over their funding costs by prioritising payments.

While banks are the traditional source for Overdrafts, they are not the only source. We have connections with commercial lenders that offer highly competitive rates and flexible arrangements for lines of credit. Assess your requirements and request a quote to consider if we can source a workable solution to ease your cash flow pressures.

Alternatives to Cashflow Loans

While most businesses will operate with an Overdraft at some stage, other more workable options may provide solutions to longer term issues. Such issues may arise with contracts which require extensive purchase of materials and supplies and where the progress payment schedule means delayed receipt of income.

This can often be the case for manufacturers, especially when product lines are being developed and new equipment commissioned. There can be a lengthy period between commencement of production, the product launching into the market and income from sales received. Similar scenarios

are not uncommon in building and construction where materials and labour need to be covered upfront and payment for services schedule at different completion stages.

For these types of scenarios, businesses may consider Secured and Unsecured Business Loans. These can be sourced with terms from 1-2 years to 7 years. Providing versatile funding for a wide range of expenses. Unsecured loans attract higher rates than secured loans. But operators may offer other assets as loan collateral where the materials or expenses are not acceptable collateral, to be eligible for lower rate secured options. Use our Finance Calculator to work up estimates on your requirements.

Where pressure on available funds arises from one large payment such as large insurance premium, Insurance Premium Funding may offer an affordable solution, spreading that annual premium payment over several smaller payments.

Refinancing Equipment Loans

Refinancing existing asset loans may be considered an option where there are pressures on available funds. While refinancing can present a workable solution to reduce repayments at some times, with the current interest rate scenario, it may not deliver a better outcome.

Having said that, where a business urgently needs to reduce their monthly equipment loan payments, a compromise with current higher interest rates may be acceptable. We can work up options for you to consider.

Help to Select and Source Cashflow Loans

It cannot be understated that Australian businesses are facing complex and challenging conditions. Our specialist brokers are available to help operators with financing solutions to face and overcome challenges and address specific and general issues.

Speak with Jade Equipment Finance 1300 000 003 on the cashflow loans we may source to support your business operation.

DISCLAIMER: IF MISINTERPRETATIONS, MISREPRESENTATION OR ERRORS EXIST IN THIS ARTICLE, NO LIABILITY IS ACCEPTED. THE INFORMATION IS PROVIDED ONLY FOR GENERAL PURPOSES AND NOT IN ANY MANNER INTENDED AS THE ONLY SOURCE FOR MAKING FINANCIAL DECISIONS. THOSE THAT CONSIDER THEY REQUIRE ADDITIONAL GUIDANCE OR ADVICE SHOULD REFER TO AN INDEPENDENT FINANCIAL ADVISOR.