Experience counts, especially if you are an SME that has just celebrated your second anniversary and looking for finance options.
If you have recently founded a business, you probably know that it can be difficult for start-ups to obtain finance. Here’s the good news – after about two years, more, cheaper funding options become available!
Refinancing after two years may reap rewards for any business that still wants to be hip and cutting-edge like a startup but not be burdened with high cost of funding.
At Classic Funding Group, we come across many companies that, through necessity, had obtained high interest, unsecured loans to kick off their business idea. While Classic Funding Group, unfortunately, cannot assist businesses with finance at the start up stage, once they have been trading for two years, we have a number of options that could significantly reduce their cost of funds.
Here are finance options available for SME owners after two years:
Every business needs to invest in equipment essential for their operations, and financing can make it easier to access this equipment while keeping the cashflow running smoothly.
If you’ve been trading for two years, have a clear credit history and are a property owner, you may well qualify for a $35,000 “no financials” equipment finance facility with Classic Funding Group. This means you can finance any number of assets up to $35,000 without having to provide financials.
After you’ve been trading for three years, the finance amount you may be eligible for without having to provide financials jumps to $75,000.
As the finance is secured against the assets and the term can be up to five years, the finance cost is most likely going to be lower than a short term unsecured loan, which is often what businesses are stuck with when they first start up.
If you already own equipment, such as printing machines, forklifts, vehicles or other capital assets, you may be able to release capital from those assets with “Sale-back Equipment Finance.”
By ‘selling’ the equipment to a financier, and then effectively leasing or financing the equipment “back,” you receive an injection of capital into your business, and can repay any outstanding loans or ATO debt.
Invoice finance, also known as debtor finance, is suitable for a wide range of businesses, especially those that are looking to grow. This form of cashflow finance uses the equity in your unpaid invoices, to give your business access to money that is owed to you.
Businesses selling equipment to other businesses often face the challenge of having to offer discounts or extended credit terms to make a sale, as their business customers’ purchasing decisions are impeded by their own cashflow pressures.
If you have distribution rights for gadgets, equipment or machines and have been trading for two years or longer, you can partner with Classic to offer your goods on a payment plan to your customers.
This means that your customers do not need to come up with the money upfront to buy from you and you receive payment straight away, improving your cashflow and reducing your reliance on bank overdrafts.
Whatever financial challenges you’re trying to overcome, if you’ve been in business for two years or more, it is worthwhile to review your options.
Brought to you by David Wright, Classic Funding Group