Business banking news and advice - page 6

4 types of finance to get your business back on track for 2021

Thursday, 26 November 2020

After a tough year for many businesses, things are looking up at long last. New data from the Australian Bureau of Statistics (ABS) show that revenue rose for 24% of businesses this month. Indeed, with more Australians now out and about, Christmas could present a great opportunity for your business to boost its sales even further so you can start off the new year strong and in the green. “One in five (22%) businesses indicated they have capital expenditure plans over the next three months, with about three quarters (73%) of these businesses expecting to spend the same or more than what is usual for this time of year,” ABS’s head of industry statistics, John Shepherd said. Whether you’re looking to purchase more supplies or build out your digital presence to attract online shoppers, having extra funds at the ready could make all the difference over this busy holiday season. That’s when an alternative non-bank business loan comes in. With applications that take just minutes and funding in 24-48 hours, these business loans are an easy way to secure the finance you might need over summer. With that said, there are a number of different loan options out there, some of which might suit your business needs better than others. Scroll down for four types of business finance to help you get the ball rolling for December …

Farmers flock to apply for business loans as 82% of NSW declared drought free

Friday, 20 November 2020

After years of misery, the drought spell may finally be breaking for New South Wales, with 82% of the state now declared drought free .But farmers aren’t just rejoicing with a celebratory dance in the rain. New research shows they’re also using this good fortune to fast track their business’ growth. For one, there’s been a surge in agribusinesses buying new farming equipment to prepare for this year’s crop season. The value of business loans lent out for agricultural machinery is up by over 100% in NSW since this time last year, according to figures released by the Commonwealth Bank today. “We’re seen asset finance for ag machinery, particularly tractors and harvesters, increase significantly,” Commbank’s executive general manager of regional and agribusiness, Grant Cairns said. “Across the country, new asset financing for tractors is up 119% - the highest volumes we’ve seen in the past three years, and financing for harvesters is up 108%.”Cairns said those huge percentage jumps aren’t surprising, given how many incentives farming businesses have right now to invest. “Nationally, farm values are up, commodity prices are holding firm, interest rates are at record lows, seasonal conditions have been good, there is strong consumer and retail demand for fresh produce and there’s Government incentives like the instant asset write off scheme,” he said. For context, the instant asset write-off (now extended till 30 June 2021) allows businesses earning up to $500 million per year to claim immediate tax deductions on multiple asset purchases - capped at $150,000 each. This means the write-off would be able to cover ‘big ticket’ items like tractors and harvesters, giving farmers the opportunity to shave off a chunk of their 2020/21 tax bill.RELATED: Small business loan approval sits at 70%: how to apply for yoursThinking of making an investment for your own business? If you need a hand funding your next piece of machinery, get started with one of the equipment finance options below.

Small business loan approval sits at 70%: How to apply for yours today

Thursday, 22 October 2020

Despite COVID-19 slowing down activity in many industries, the business loans market has remained busy throughout 2020. For over 250 days now, Australian banks have approved more than 500 loan applications from small-to-medium enterprises (SMEs) a day. This is according to the latest data from the Australian Banking Association (ABA), which shows a whopping total of $41 billion has been lent out to SMEs and sole traders between 1 February and 7 October. ABA’s chief executive, Anna Bligh said that with the loan approval rate sitting at 70%, it’s clear Australian banks haven’t left struggling small businesses behind. “Australian banks are continuing to provide a lifeline to small and medium businesses across the country. The rate of lending has held up strongly despite the pandemic,” she said. “The banks’ commitment to small business has been supported by a number of Government and regulatory measures, including the RBA’s Term Funding Facility, changes to business lending rules, the instant asset write-off, and the SME loan guarantee.”These figures come after the federal government announced plans last month to scrap ‘responsible lending’ laws in order to further reduce red tape around accessing credit. The proposed shift from the current practice of “lender beware” to a “borrower responsibility” principle would essentially allow lenders to rely on the income and expense information provided by borrowers, helping to speed up the loan approval process. Australian Small Business and Family Enterprise Ombudsman, Kate Carnell said she supported the proposal as a step towards loosening unrealistic serviceability rules for small businesses. “We are aware of small businesses that have been asked for all sorts of documentation by the banks - even for loans that have been 50 percent guaranteed by the Federal Government - including director guarantees, which really means the family home. It’s no wonder small businesses owners are reluctant to borrow,” she said. “Importantly the banks will still be accountable to ASIC [Australian Securities and Information Commission] and the Government has pledged greater protections for vulnerable borrowers.”

Fintech Archa to launch new neo business credit card

Wednesday, 21 October 2020

Ever heard of a neo business credit card? Say hello to Melbourne-based fintech Archa.  This week, Archa announced that it has become a principal issuing member of Mastercard, meaning it can access the card providers leading global payment network. The partnership will allow the fintech to launch its new neo business credit card along with an app with innovative tools to help businesses manage their expenses.  “This is a really important strategic milestone for Archa. We’re thrilled to have the support of Mastercard as a critical foundation to our business model,” Archa’s chief executive, Oliver Kidd said. “We look forward to working closely with Mastercard over the coming years to support small businesses throughout the region.”

Grameen microfinance: business loan offers low-income Aussies a way out of crisis

Thursday, 17 September 2020

As job losses and pay cuts become the new norm for Australians, the question of how to earn a sustainable income has never been more pertinent. But what are your options beyond relying on government stimulus or payday loans which charge exorbitantly high fees? Global microfinance group Grameen has stepped in to offer low-income Aussies another way forward: setting up your own small business. Microfinance refers to small amounts of working capital that are provided to borrowers, typically excluded by mainstream lenders. These loans are backed by social collateral, which means each group of borrowers is collectively responsible for making sure their members meet their repayments.Grameen Australia’s chief executive officer, Adam Mooney says Grameen has a legacy of helping countries and communities out of crisis and its expansion to Australia in the coming months will aim to do just that. “We’re seeing Jobkeeper and Jobseeker being tapered off, so we want to be there at the right time in the right place to be able to provide the incentives to work but also the opportunity to work for many millions of people,” he says. While Grameen began in Bangladesh in the 1970s, its success in reaching 130,000 women in the US over the past decade has proven that its microfinance model can also be applied to “so-called developed countries”. The idea behind Grameen’s model is that it acts as a springboard for entrepreneurs to build up their business and become self-sustaining.“We want to be an enabling financial actor rather than a permanent fixture,” Mooney says.“The ideal scenario for each business is that it generates sufficient return, that it can grow itself and doesn’t need to continually come back for additional loans.”Mooney says the model especially complements Australia’s migrant and Aboriginal and Torres Strait Islander communities who “have got great skills and an aspiration but haven’t had that sort of investment capability to be able to start their own businesses.” For example, Grameen’s group formation structure lends itself well to the principles of collective wealth and collective identity that are culturally familiar to Indigenous people.

Small businesses reveal what's hurting their recovery

Last updated Wednesday, 2 September 2020

As small businesses grapple with the uncertainty of operating amid COVID-19, new research shows cashflow remains the biggest barrier to recovery. For 1 in 3 small business owners, cashflow sits top of mind as their primary worry, according to figures released by business lender Finstro this week.This is based on surveys with 1,200 Aussie small businesses in July, just before Victoria’s second pandemic wave worsened. Finstro’s chief product officer, Tom Whitworth said these concerns around cashflow reflect the “payments crunch” that many small to medium-sized enterprises (SMEs) face right now. That is, there’s a real struggle to balance slow-paying customers with suppliers requesting faster payment times. “Suppliers, who are rightly concerned about securing payments in this challenging environment are increasingly demanding shorter trade terms and often cash on delivery,” Whitworth said. “This makes it difficult for small businesses who are looking to order supplies and reinvigorate their businesses after a period of significantly reduced trade or shutdown.”

Need a business loan? New CommBank platform promises funding in 20 minutes

Friday, 28 August 2020

In the business world, not everyone has the luxury to wait for extra finance. Luckily if you need that cashflow boost ASAP, whether to purchase stock or pay your suppliers, Commonwealth Bank may have a solution. This week, the big bank launched a new online platform that promises to give its customers access to business loans in near real time. With BizExpress Online, eligible CommBank small business customers can apply for loans of up to $50,000, via their Netbank or the CommBank app. Once an automated lending decision has been made, funds will arrive in their account in as little as 20 minutes. According to CommBank’s business banking group executive, Mike Vacy-Lyle, BizExpress Online builds on an earlier product that was introduced to speed up the lending process.“When we launched ‘BizExpress’, the aim was to provide a simpler and faster lending experience for our small business customers, with same day decisions and funding within a week,” he said. “Our latest investment in the new digital version makes it even easier and quicker for our customers to get the financial support they need.”Right now, BizExpress Online is only available with business lending under the government’s SME Loan Guarantee Scheme. Under the first phase of this scheme, 50% of all new three-year unsecured business loans of up to $250,000 issued by participating lenders until 30 September 2020 will be guaranteed.“Small businesses need quick access to cash flow to keep them going through these tougher times - and BizExpress Online aims to provide them with this,” Vacy-Lyle said. This funding also comes with waived fees over the life of the loan and deferred repayments for the first six months.CommBank expects BizExpress Online will be expanded to other non-scheme loans and products in the coming months.

Back to Business loans: Prospa offers a way out of crisis

Tuesday, 18 August 2020

2020 has been a tough year for many Aussie businesses. Three months since COVID-19 was first declared a pandemic, 47% were still reporting falls in revenue, according to Australian Bureau of Statistics (ABS) data released last month. But as parts of Australia begin to reopen and navigate a COVID-safe environment, the next big question is this: how can small businesses ensure cashflow issues don’t stop them from bouncing back with full force? For some, the answer may be the government’s Coronavirus SME Loan Guarantee Scheme. Under the first phase of this scheme, set to end 30 September 2020, the government is guaranteeing half of all three-year unsecured business loans of up to $250,000 issued by participating lenders. Under the second phase, running between 1 October 2020 and 30 June 2021, small to medium-sized enterprises (SMEs) can access even larger loans of up to $1 million and repay them over a longer period of five years. Prospa is one of the scheme’s 41 participants , alongside other non-bank lenders including GetCapital, OnDeck Capital and Spotcap. And it’s catering for the scheme and the tough climate businesses face right now with two new products: the Back to Business loan and the Back to Business Line of Credit. (Note: from 30 September onwards, these products are no longer be available.)With both products, approved businesses can receive funds of up to $250,000 in as short as 24 hours, and they also won’t need to worry about making any loan repayments for six months. Prospa’s co-founder and chief revenue officer, Beau Bertoli says the focus of Back to Business is to help small businesses not just survive, but thrive for the rest of 2020. “Of course there are a lot of viable businesses across the country who were hit hard by restrictions and now need cash flow support, but many are now starting to get back to business and plan for the future,” he says. “Our funding has helped these small businesses make upgrades to meet new sanitation requirements, revamp their websites and introduce online services, and even launch digital marketing campaigns.”“There are also businesses in essential services or particular sectors experiencing demand who want to seize growth opportunities while they can,” he adds.  “For example, with more Australians gardening and renovating, we’ve had fertiliser and tiling businesses with months of work lined up come to us for funds for extra stock and supplies.”

Debt relief? Small business recovery remains slight

Thursday, 13 August 2020

While Aussie businesses are making small strides towards recovery, new data reveals many continue to struggle with overdue debt. Figures from digital credit agency CreditorWatch released this week show that fewer businesses defaulted on credit last month - July’s default figure was 13% lower than in June. July also saw companies take a shorter time to repay any money owed, with an average 8% decline in payment times recorded across the board. But CreditorWatch’s chief executive officer, Patrick Coghlan said these signs of improvement are modest at best. For one, payment times were still a staggering 224% higher last month than in July 2019.

Westpac nudges businesses towards Merchant Choice Routing

Wednesday, 5 August 2020

Westpac announced today that thousands of Australian businesses have not yet taken advantage of Merchant Choice Routing (MCR), and it will be taking a proactive role in helping merchants activate the service.Over the coming months, Westpac will reach out to merchant customers who stand to benefit from MCR, and unless they opt against it, will switch them over.Westpac chief executive business division, Guil Lima estimates that around 37,000 small businesses will be better off using the service.“Westpac’s decision today will help merchant customers with Westpac owned terminals activate pricing that’s best for them, giving them one less thing to worry about at an already very challenging time,” he said.