Areas of Law » Lending » Grow Your Business

Call us on 02 4940 4602

You Can Grow your Business without Losing Cash Flow

Financing and running a business can be tough, especially in the early years. You need inventory, materials, equipment, and labor to keep it all going. A good business loan can help, but loans can be hard to come by for new businesses. The answer may be asset-based lending.

What is Asset Based Financing?

Asset-based lending is a business loan secured by assets. A line of credit is secured by equipment, real estate, inventory, accounts receivable, or other assets. Asset based loans vary in nature and interest rates.

The Benefits of Asset Based financing for Business Equipment Financing 

The cost of new equipment can eat into your valuable business capital. This doesn’t have to be the case with asset-based financing. You can tailor your repayments to match your needs, cash flow and the seasonal flows of your business. Deposits are optional and usually unnecessary. And generally, the only security you need to provide is the asset itself. When you’re looking at asset based financing you should consider the interest rate, but also the repayment amounts, and any other costs associated with the finance. This will help you determine the total amount you’ll pay.

Tax Benefits of Asset Based Financing

Depending on the type of finance you get, you may be able to claim your interest or rental payments, or depreciation on the asset— these business expenses can be brought forward so they can be deducted from this year’s taxable income.

Asset based financing can also help you reap short-term tax benefits. By bringing your planned purchases forward into the current financial year, you can start claiming deductions straight away. If you already have asset finance in place, talk to your accountant to make sure you’re claiming all the deductions you’re entitled to.

Get Good Advice from a Commercial Lending Broker

An asset-based business line of credit is designed to allow the company to borrow to meet expenses until payments are received and cashflow generated. It bridges the time between the sale and receiving the payment.

Properly structured, these loans can be very beneficial to a company. However, it is necessary to get good advice and negotiate the best rates. Deb McDonald-Cocks is an expert in this field. With many years experience as a commercial lending broker, she understands the market completely and can advise you on the types of loans that are best for your situation. As a large-volume writer, she has access to many “priority” channels in the banks and is in a position to help you negotiate the best rates. Before you make a move into asset financing, or take out any business loan, it pays to get the best advice available. Call Deb today and discuss your short-term and long-term strategies and how to grow your business in today’s environment.

Contact Deb on 02 4940 4602