small-business

How to finance your new small business purchase

Now you can finance your new small business purchases and claim tax deductions.

The 2015 Budget introduced a new tax benefit for small businesses in the form of immediate tax deductions, and the 2017 Budget extended these to 2018, while also raising the annual turnover threshold for eligible businesses from $2 million to $10 million.

Now, businesses with an annual turnover of less than $10 million can claim immediate tax deductions for all business-related purchases of less than $20,000. This change in the legislature was effective from May 12, 2017. The recent June 2018 Budget announcement saw this tax deduction extended to June 2019.

It might be a great time for small business owners to claim the tax breaks on offer, but they may not be extended again after June 30 2019, and business owners might not have the funds needed to purchase eligible business-related before then.

NAB QuickBiz Loan Offer

NAB QuickBiz Loan Offer

From

12.95 % p.a.

fixed rate

  • Borrow up to $100,000
  • Fast application and turnaround
  • Sole traders, partnerships and companies can apply
Security Logo

100% confidential application

NAB QuickBiz Loan Offer

An unsecured business loan up to $100,000 you can apply for in minutes.

  • Interest rate from: 12.95% p.a.
  • Interest rate type: Fixed
  • Application fee: $0
  • Minimum loan amount: $5,000
  • Maximum loan amount: $100,000
Go to site
Promoted

Business loans available to apply for

Rates last updated November 16th, 2018
Name Product Min Loan Amount Max. Loan Amount Loan Term Application Fee Product Description
NAB QuickBiz Loan
$5,000
$100,000
1 to 3 years
$0
Apply for up to $100,000 and get a response within 60 seconds. No upfront or ongoing fees and a transparent fixed rate.
Lending Express Business Loans
$5,000
$500,000
0.25 to 2 years
$0
Apply online for up to $500,000 and get access to over 25 lenders through Lending Express.
Valiant Finance Business Loan Broker
$5,000
$1,000,000
0.25 to 5 years
$0
A Small Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 60 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Note: If you apply and have your loan settled in November 2018, you will recieve $250 cash-back.
Moula Business Loan
$5,000
$250,000
0.5 to 2 years
$0
A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.
GetCapital Flexible Business Loan
$5,000
$500,000
0.5 to 2 years
Initial draw down fee
A flexible business loan up to $500,000 with convenient top up and redraw facilities. Business must have been operating for 9 months+ and have monthly sales of $10,000+
businessloans.com.au Flexible Business Loan
$5,000
$500,000
0.5 to 2 years
Initial draw down fee
A business loan up to $100,000 for unsecured loans, or $500,000 for secured loans that you can use for any business purpose. Transparent costs and redraw facility available.
OnDeck Business Loans
$10,000
$250,000
0.5 to 2 years
2.5% origination fee
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.

Compare up to 4 providers

Learn how to compare a business loan

What’s involved with small business finance?

While small businesses may be looking to expand or simply invest in their existing operations, cash flow fluctuations or shortfalls in funding may limit the possibilities available. This is where small business finance comes in. This type of finance can help small business owners purchase office equipment such as chairs and computers, or make renovations to premises or purchase business vehicles. Depending on the type of loan you opt for there may be restrictions available – for instance with secured loans – so be sure to check these before you apply.

There's a variety of loan options available, which are detailed below, that can help businesses not only get the financing they need, but also not make repaying the loan too difficult. If regular repayments aren't going to work for you, a line of credit loan, credit card or overdraft might be an option. For those that would prefer the regularity of repayments to work into business budgets, standard business loans are available.

Financing options available to you

  • Credit Cards. Depending on your credit limit, you could use your credit card for purchasing any business-related items. There's a range of both business credit cards and personal credit card options available that offer you a convenient line of credit to cover cash shortfalls.
  • Overdrafts. Similar to personal loans, these enable you to gain access to ready money without having to use your credit card. Set up an overdraft on your account to have access to up to and including a specified limit for a revolving line of credit. You usually only have to pay for the amount you use.
  • Interest-free Finance Schemes. Many retailers offer interest-free finance schemes that enable you to take various items home while paying for them in instalments or in a lump sum before the interest-free period concludes.
  • Line of Credit Loans – Similar to credit cards and overdrafts, you can withdraw funds as often as you need, up to a specific amount. You’ll need to pay interest only on the amount you owe.
  • Bad credit business loans. Less traditional forms of credit are available if your credit history is less than perfect – consider a bad credit business loan to get your business back where it needs to be. Keep in mind higher fees and interest apply, and stricter requirements in terms of repayments may also be in place.

Find the best business credit card for you

If you want to start your own business, you can make business-related purchases via payday loans too. These loans provide you with ready money until the day you receive your next payment. In addition, they feature different eligibility requirements and application processes too. So, even if you have bad credit, you could still qualify for a payday loan.

Some features that come with these finance options

  • Interest rates: Varying interest rates apply on the loan options details above. For instance, business credit cards might come with rates that can be as low as 9.99% p.a. and as high as 22% p.a, so make sure you opt for a competitive rate to help keep your business costs low.
  • Fees: Every credit option features various fees and charges. From application fees to account-keeping fees, ensure that you understand the fee structure associated with the credit option that you select.
  • Minimum loan amounts: The amount of credit you receive will vary from one line of credit to another – will you be able to get sufficient funding for your business needs?
  • Repayment options: Some lines of personal credit require that you pay a minimum amount by a specific date, while others will require that you make repayments via monthly instalments. In some cases, you might need to repay the entire amount due by a specific date to avoid paying interest. Choose a financing option with a repayment structure that works with your budget.
  • Loan restrictions: You can use your credit card for making various purchases, but other credit options come with various restrictions. For instance, secured loans may only allow you to purchase certain assets, such as a new car, with the loan amount. Interest-free finance and dealers’ finance schemes will also usually apply only at specific shops and for specific products.

Tax benefits to be aware of

Small businesses with annual turnovers of less than $10 million can look forward to lower tax rates of 27.5% in the 2017 Budget, while unincorporated businesses with annual turnovers under $5 million can benefit from an increase in the rate of the unincorporated tax discount to 8%.

In addition, the $20,000 tax break applies to businesses that can demonstrate ongoing activity and trading via quarterly Business Activity Statements. But, businesses cannot utilise this provision for claiming tax breaks on assets worth more than $20,000.

Moreover, business owners cannot claim tax breaks on certain items. These include as horticultural plants, software developed in-house, stocks and so on.

What’s the best way to finance your small business purchase?

Consider the following points to determine which credit option best meets your requirements.

  • Availability of funding: If you require a lump sum amount, obtaining a loan might be your best bet. Alternatively, if you require ongoing access to credit, you could consider obtaining a line of credit loan or a personal overdraft.
  • Interest rates: It is always best to look for credit options that have competitive rates of interest for the features they are offering.
  • Fees and charges: Look for credit options that do not inflate the amount you borrow by an assortment of fees and charges – is the loan competitive when compared to similar offering?
  • Flexible repayments: If possible, use credit options that give you convenient repayment options. This includes the right to repay the loan early without having to pay any extra charges, or that gives you access to extra repayments that you may make.

How else can you save on your small business purchases?

Shopping online is not only convenient. Often, it gets you the best deals available too. Deals and coupon codes can help you save on small business purchases, and you can find a huge range of them available right here at Finder.com.au.

See what deals and discounts are available

When you buy eligible business purchases here, they can be claimed back on tax, while you can also take advantage of bonuses like free shipping, price match guarantees and straightforward discounts or low prices. If any business items come to mind, you might want to check for them here, including:

  • Mobile phones
  • Electronics and other appliances
  • Furnishings
  • Travel and entertainment deals and,
  • Restaurant deals

Frequently asked questions about business finance

    Business finance can be a good option to consider, especially if you have the means to repay but just don't have the ready money. Keep in mind the multitude of credit options available to you, and compare them to find the best one for you and your business.

    DISCLAIMER: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information applicability to their own particular circumstances.

    Picture: Shutterstock

    Was this content helpful to you? No  Yes

    Related Posts

    Ask an Expert

    You are about to post a question on finder.com.au:

    • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
    • finder.com.au is a financial comparison and information service, not a bank or product provider
    • We cannot provide you with personal advice or recommendations
    • Your answer might already be waiting – check previous questions below to see if yours has already been asked

    Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy.

    2 Responses

    1. Default Gravatar
      August 23, 2017

      How to acquire business loan to buy existing business without mortgaging property

      • Default Gravatar
        MariaAugust 23, 2017

        Hey Vinodsingh,

        You may find useful information on our page on Unsecured Business Loans that features loans which do not require you to attach an asset as security.

        Before applying for a loan, please ensure that you meet the eligibility criteria and requirements of the loan option or lender and make sure to read the details, as well as the relevant PDS/ T&Cs of the loan option before making a decision and consider whether the product or option is right for you.

        I hope this helps.

        Cheers!
        Maria

    Ask a question
    Go to site