5 Things You May Not Know About Equipment Finance

When it comes to getting finance for your new business vehicle/equipment there are so many different options and things to consider. Here are some of the things you may not know and may help you with your next car purchase.

1. Shop around for your car and your finance:

Most of you would have seen the 1% interest rates advertised by some dealerships on the TV and radio. They make it sound like a fantastic deal, however, this is where they trap you. In most cases, they mark up the price of the vehicle and you could end up paying a lot more than you would if you got a loan at 5%.

Do your research and shop around on the vehicle you are looking at purchasing and don’t simply get the finance from the dealership. Know what the car is truly worth and how much you can afford to pay per month.

2. You can get a pre-approval:

Before you even start looking at a vehicle we recommend getting a pre-approval so you know exactly how much you have to spend. Having an approval in place also puts you in a better position to negotiate on the vehicle price which can potentially save you thousands.

3. Less Interest vs Cashflow:

If you take out equipment finance over 3 years compared to 5 years you will pay less interest meaning your overall cost of the vehicle will be less. This usually means that your monthly repayments will be higher which can be an issue for some. If keeping your monthly expenses down is important to you, discuss your options for a balloon payment.

4. Financials and tax returns are not always required

Since the banks have relaxed their policies a little you will find that some lenders don’t even need tax returns and financials or are willing to accept only 12 months financials. If you have been in business for few years and have a good credit history, approvals may be automatic for loans of up to $150,000.

5. There are different tax deductions for each type of finance

Each method of financing your equipment has its advantages and disadvantages. These finance options can affect what you can and can’t claim on your tax returns. We work together with our accounting department to determine the best loan structure for your business.

If you are in the market get in touch with us today so we can help you get approved.

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Do You Have A Business Protection Plan?

Having a business plan is about taking on risk for future success.

Business owners take on risk by leaving steady employment, using their own capital and taking out debt to create a future income stream that will far exceed what can be earned by working for someone else.

Business Initiatives recognises this, and we value the relationships that we create with the people whose hard work and determination create jobs and wealth within our community.

But what happens to your business if something happens to you?

As a business owner, you should have a business protection plan in place that considers what might happen to your business should one of the owners pass away, become totally and permanently disabled or suffer a terminal or critical illness.

Within a business, a few key people generally provide the capital, manage the business and produce the profit. If the business has no viable succession plan, there may be a significant hardship for the surviving business owners and family members.

There should be a plan in place to ensure that you, as the business owner, can protect the business as an ongoing concern against events that may adversely affect its liquidity, profitability and ongoing viability.

Time after time, experience shows us that many businesses suffer due to a lack of planning for the unexpected. The financial consequences of an event can usually be minimised with enough foresight.

The six main business needs to consider are:

  • Business loan protection.
  • Shareholder/director loan and beneficiary protection.
  • Key person revenue protection.
  • Business succession protection.
  • Business expense protection.
  • Keeping your cover up-to-date as your business grows.

The team at Business Initiatives can help you identify risks to your business and protect you, your family and the future success of your business.

Your business is important, make an appointment to see us today. 

Getting Started As A Property Investor

So, you have some equity in your home or cash stashed away in the bank not working for you. You have seen friends, family and colleagues buy property. You have started to consider the idea of becoming a property investor but, you have no idea on how to get started.

Today we will discuss a series of steps that you need to undertake before you plunge into successful property investing. Each step is as important as the next and this list is not exhaustive.

Let’s get started!

Step 1:     Assess your financial capacity
Step 2:    Set goals and determine objectives
Step 3:    Understand your risk profile

Step 1:    Financial Capacity

You can’t start your search for a property if you do not know how much you can afford, or what the lenders will lend to you. There is no point in searching for property at a certain price point if your true borrowing capacity is significantly less. This only wastes your time and energy and puts a dampener on your project.This is where an experienced mortgage broker can be of benefit. As mortgage brokers, with over 20 years experience in property investing, we can assist you with determining your current and future borrowing capacity.First and foremost we can provide advice on:

  • How much you can borrow;
  • How to structure your loans to maximise your tax advantages;
  • Who the best and cheapest lenders are.
  • The process to build a successful property portfolio.Don’t underestimate the importance of finance to your overall property investment strategy. Without a sound financial plan in place, you could limit how much you could borrow and ultimately miss out on opportunities to create wealth.

Step 2:    Set Goals & Determine Objectives

It is virtually impossible to create a successful property portfolio if you don’t understand what your short and long-term goals are. You need to have an objective in mind. In any pursuit, whether it is work, sport or being a property investor, the key to being successful is developing a clear strategy and setting goals.

The first point to achieving your goals and meeting your objectives is to:

  • Plan ahead
  • Have an exit strategy in place
  • Build a team around you
  • Learn how to research
  • Never give up

By ensuring you set and determine your goals, you will be on your way to success.

Step 3:    Understand your risk profile

What, where and when you invest in property will be determined by your risk profile. Your risk profile will depend on a number of factors including

  • Age – a younger person who has time on their hands may be prepared to take more risks than somebody near retirement.
  • Family Situation – those people with fewer commitments (such as children) may be prepared to take more risks than other investors.
  • Experience – those who have skills, knowledge and experience with investing may be prepared to take more risks than a person who has never invested before.
  • Investment Goals –whether you are investing for capital growth or cash flow.
  • Timing – people who invest in a short-term timeframe may be taking on more risk, especially if they don’t have the experience. Other investors, where timing is not critical, may take a more thorough approach.

There is a risk in any form of investing, whether it is property, shares or even buying a new car. The objective of your risk profile is to identify what form of a risk taker you are. Ultimately, whether you are a young person who is prepared to take a few more risks or a married person with kids, your end goal is to ensure you minimise your overall risk exposure.

To take your first steps towards property investing please call our office on 08 8431 7444.

Refer A Friend

We Are Open For New Business

From now until the 30th of September 2017 if you refer a friend to Business Initiatives and they take up one of our services we will send you a $100 Coles Myer gift card!

This offer applies to ALL our services so, if you know of someone who needs accounting, financial planning, insurance or a loan we would love to see some new faces and reward you in return!

We are open for new business and looking for quality clients

Please ensure you read the below terms and conditions. You must meet all criteria to be eligible for the voucher.

Terms and Conditions:

  • The client you refer to us must engage one of our services (Accounting, Loans, Financial Planning or Insurance).
  • The referral cannot be an existing client or spouse and must not have been a prior client of Business Initiatives.
  • Gift cards will not be posted until after the 30th September 2017.
  • For each new client you refer you will receive $100 voucher.
  • Please ensure the person you refer mentions your name to receive the voucher or advise us by email: answers@businessi.com.au
  • Business Initiatives reserves the right to determine whether the referee has met all of the terms and conditions of this promotion
  • This scheme will run from the 8th August 2017 until midnight on the 30th September 2017. Any referrals made after this date will not be eligible for this gift.

2017 SA State Budget Update

The 2017-18 South Australian State Budget was passed down on June 22, 2017 which included the following Budget Measures Bill 2017:

Job Accelerator Grants
From 1 July 2016, payments will be increased by up to $5,000 for businesses that hire apprentices or trainees and will be backdated to 2016.

Off-the-plan stamp duty
From 22 June 2017, the off-the-plan stamp duty concession of $15,500 will be extended until 30 June 2018 but will be retargeted so that it no longer applies to foreign purchasers.

First Home Owners Grant
From 22 June 2017, a $10,000 grant will be provided to eligible off-the-plan apartment purchasers where the contract is entered into between 22 June 2017 and 30 September 2017.

First homebuyers who want to buy an apartment in the city will now be able to get up to $40,500 in assistance.

Land Tax Exemption
From midnight 30 June 2017, a five year land tax exemption will apply to eligible apartments bought off-the-plan where the contract is entered into between 22 June 2017 and 30 June 2018.

Payroll Tax
From 1 July 2017, the Payroll Tax rate for small businesses will be lowered to 2.5%.

Stamp Duty Surcharge
From 1 January 2018, a stamp duty surcharge of 4% will apply to foreign purchasers of South Australian residential property.

Stamp Duty Transfer
As per the changes made in the 2015 State Budget, from 1 July 2017, the stamp duty transfer of a commercial property will be reduced by two thirds. Commencing 1 July 2018 stamp duty transfer on a commercial property will be abolished.

To discuss any of these changes and how they will impact you or your business please contact our office on 08 8431 7444 or send us an email at answers@businessi.com.au

How does a car cost you more on 0% interest rate?

We recently had a client who contacted us about this fantastic deal that they were getting on their new car finance. He said ‘they are not charging me any interest at all.’ Naturally we were sceptical. We did some further investigating and yes he was generally paying no interest on this loan.

After a few days of doing some research we rang him back to advise we could SAVE him money on the deal he was being offered from the dealership. HOW? We found that the same car could be purchased at a lower on road cost and if we did the finance using standard interest rates his total payments at the end of the finance would be less than the original on roads cost he was being charged with their “0%” interest rate.

If you are being quoted a deal that seems ‘too good to be true’ – it probably is. We also found this article to be quite interesting and supports our findings:  Click Here to Read More 

Make a booking with our office to discuss all of your equipment finance needs.

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