Category Archives: Uncategorized

Need a home loan for a house you can build for $14K?

Amid all the talk of house prices and affordability, the cost of the actual buildings themselves might be about to take a tumble, if tech developments in 3D printing and automated bricklaying – to name just two – become commonplace in the building industry.

Earlier this year a Russian company called Apis Cor demonstrated that a house – admittedly quite a small one at 38m2 – could be 3D printed on site and painted inside 24 hours at a cost of just $10,134 (AU$13,325). The house is designed to last 175 years.

This is not the first house to be built using 3D printing technology, however the difference is that the Russian house is printed on site rather than being printed/pre-fabricated elsewhere and then delivered and assembled on site – when the house has been printed the printer itself is moved offsite using a crane.

The 3D printing approach means that a number of design features otherwise very hard to replicate using conventional building methods, are easy to execute. The display house has curved external walls, and in fact almost any building shape can be created. The finishing touch in the house was the addition of a curved screen Samsung TV matching the curvature of the wall.

If 3D building printing is not your thing – maybe you prefer a slightly more traditional building – then perhaps you should consider the Hadrian X – a robotic bricklaying machine that can lay up to a thousand bricks every hour – the equivalent output of two bricklayers over a day. That makes the robots 20-25 times faster than their human equivalents.

The company behind Hadrian X – Fastbrick – is based in Perth and has been around since 2015 but a recent deal with US construction equipment company Caterpillar, which has taken a $2.6M stake, has thrust it into the limelight. The company claims that its robots not only build faster but more accurately than humans, allowing a four bed house to be built in two days, instead of the usual 6-8 weeks, at a saving for the home builder of $20K-$30K.

Futurists looking to what houses might be like in fifty years time are looking at the impact that current technology developments outside the home might have on housing design. Although fully self driving cars are limited to the Google experimental cars zipping around parts of California, Tesla and other manufacturers are reasonable advanced in the designed of fully self driving vehicles.

At a certain point cars will morph into a very affordable and convenient taxi service which may make owning a car not as important as it is today. If cars are no longer needed by many homeowners, garages may no longer be needed either, and the space could be put to other uses. Maybe as drone hangars. If advances in drone technology continue, we may all have our own drones that ‘pop down the shops’ (or something similar) while we stay at home.

All of this crystal ball gazing about how easy and cheap everything will ultimately be, doesn’t however address the issue of housing affordability. Ironically it’s not the cost of the house that’s the main component of rising house prices – it’s the cost of the land itself. And no amount of technology (at least that we’re aware of) is going to change that.

PS We haven’t yet had a loan application for a 3D printed home, but we’re looking forward to our first!

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Running on the smell of an oily rag

This is one saying that may not make any sense at all to drivers (if the term ‘drivers’ even means anything) in 25 years time. ‘Well, that was back when transportation devices needed to be topped up with fuel, son.’ might be the response from the dad of the future.

But since it does still mean something in 2017, as a follow up to one of our previous articles on the cost of owning and running a car, we thought we’d look at what most people see as the major cost component – the cost of the fuel.

Petrol pump

Fuel consumption per mile/km has improved significantly over the past 40 odd years – figures out of the US show that average fuel economy (for cars) went from around 13mpg (18 l/100km) in 1975 to 33mpg (7 l/100km) in 2010. The latest available figure for Australia is from 2013 when the passenger vehicle average was around 11 l/100km, perhaps reflecting the greater popularity of gas guzzling four wheel drives down under.

And with the not so new generation of hybrids and pure electric vehicles on the market in Australia or coming soon, the whole concept of fuel consumption is getting a bit more complicated.

There are essentially four different options you have if you’re buying a new car and you’re looking to get one that’s economical with fuel – diesel, petrol, hybrid and pure electric. All have their pros and cons – let’s have a look…


Despite the recent ‘fudging’ of the fuel consumption figures by some fancy footwork on the part of VW, diesels are still anything up to 35% more fuel efficient than the equivalent petrol engined car.

They can also run on more environmentally friendly fuels such as bio-diesel, and newer engines do not suffer some of the problems of older diesels eg smoky/smelly exhaust fumes and difficulty starting in the cold.

Servicing costs are generally lower too, as diesel engines require less maintenance that petrol engines. However, the difference in price between diesel and petrol isn’t as great as it used to be, and the fuel efficiency benefits are generally cancelled out if the bulk of driving is short trips or city driving.


The good old ICE (internal combustion engine) has improved considerably over the last 10-15 years. One of the leaders in this field is FIAT, that, by introducing new technology (including adding turbochargers) in its smaller 900cc engines has been able to get more power and more efficiency out of these tiny powerplants.

The highest ranking petrol engined car – not including hybrids – on the Green Vehicles Guide is the tiny FIAT 500 0.9 Turbo Twin Air Auto, coming in at 3.9 l/100km, the same as the Toyota Prius Hybrid.


Hybrid cars are those that have both an electric motor and a conventional internal combustion engine to power the car. In most hybrids, it’s the electric motor that powers the car at low speed and the petrol engine that takes over at cruising speed, which is when the petrol engine is operating at peak efficiency.

When the driver wants to accelerate quickly, both power sources are used and when braking or driving at higher speeds, the spinning of the wheels feeds power back into the electric generator. Finally, when the car stops, both engines shut off.

This is how the Toyota Prius and Porsche Panamera hybrids are able to hit 3.4 l/100km and 2.5 l/100km respectively. Hybrid cars are great, the only downside is that you pay a premium for these more technologically advanced cars – the Prius is $35,990 plus on roads and the Panamera (wait for it) is $242,000.


After a succession of electric only cars that clearly failed to inspire (think the Holden Volt and the Mitsubishi MieV), it looks like Tesla may be the car company to break through for the pure electric car. Unlike these predecessors, all Teslas have a good range – not that different from what you’d get out of a tank of petrol in a ‘normal’ car – and they don’t look like futuristic utility vehicles.

The luxury end Tesla S – at $125,000 – is outselling its similarly priced rivals and the new Tesla 3, the car for the masses, is due out in Australia next year with a moderately affordable price tag of around $45,000.

All electric is a great option if you just need to nip around the local area, however it’s still a bit of a risk for a longer trip unless you know where you’re going to stop and charge. And when you do stop it’s going to take one hour of charging for each 81kms of driving using a regular power outlet or half an hour for 270kms of range at a supercharging station.

You might have to wait a while until Tesla builds a supercharging station near you – currently in Australia there are just 12 of them in total. But they are conveniently located on the drive from Brisbane to Sydney and then on to Canberra and Melbourne.

Just don’t plan a trip across to Perth.

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What your choice of car colour says about you

Metallic purple. A strange choice for favourite colour perhaps, but inspired by a particularly spectacular Lamborghini Murcielago coming round Hyde Park Corner on a rainy late afternoon in London just as it was getting dark. And it looked a million dollars, especially from a vantage point in a long bus queue.

Your choice in car colour says a lot about you apparently, and most of the cliches are true – red is an assertive, dominant colour… and by inference the driver too, and an orange car is likely to be driven by someone who is ‘bubbly and spontaneous’. And if you drive a brown car ‘you may be considered frugal’, although in our opinion the exact shade of brown is pretty important – there’s a mid/light brown which, unless you’re aiming for camouflage, is a uniquely horrible colour.

Australia remains pretty conservative in its choice of colour when it comes to cars – 33% of respondents in a 2016 survey conducted by CarAdvice preferred a white car, with grey, black and silver the next most popular colours (18%, 13% and 12% respectively). White has always been a favourite in Australia, with any number of reasons being cited – highly visible, easy to clean, cool in the heat, good resale value – take your pick.

There hasn’t always been so much choice – the Model T Ford was famously available ‘in any colour you want, as long as it’s black’ and if you want to stand out from the crowd, you generally have to pay for it. Both Ford and Toyota charge you extra for any colour other than white on their main models (Focus, Camry, Corolla), so add ‘extra cost’ to the reasons why most cars in Australia are white – to the tune of $400 on average.

And if it’s a luxury end car like an Audi, BMW or Mercedes, triple that. The highest paint related ‘extra’ we’ve ever heard about was the $29,876 you’d have needed to pay if you wanted the ‘liquid silver’ paint job on your new Mercedes SLS AMG, now unavailable (that’s the car, not the colour option – you can probably still get that on its own).

But if you want to be in with the in crowd, it turns out that the colour blue is on the up. BASF Coatings, who supply paint to many car manufacturers, put together a report this year indicating that blue was gaining in popularity because the colour ‘has a calming effect and a strong correlation with natural things’. Or maybe they just have a small surplus in blue paint they need to move.

Fundamentally it comes down to how much you want to stand out in your car. If you want to hide in the masses, get a white, grey, blue or silver car. If you want to stand out, go for something a little more garish.

We’ve heard a rumour that, while Lamborghini is keen to see you drive away in one of their cars in whatever ludicrous colour you want, their cousins and arch rivals at Ferrari are a little more conservative.

It might surprise you to know that most buyers of new Ferraris already have one or two older Ferraris in their garage. Part of the reason for this is that existing customers are given first dibs on new models. But if you put in your order on your first Ferrari and you ask for it to be pink, let’s say, Ferrari would happily supply it – but don’t expect any invitation to own another one! Mind you this could just be scuttlebutt, we haven’t put it to the test.

Finally, if you want to get the maximum attention, do what this lady in the US did – invite a bunch of graffiti artists to go wild on your car. Just don’t use it as a getaway car.

PS if you need finance for your paint job, you know who to call…


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Why now might be the time to install solar at your business

You know when Senator Cory Bernardi installs solar in his home, it’s time to start taking it seriously. This month it was reported that arch climate sceptic Bernardi had installed a 12kw system on the roof of his home in Adelaide, but gave his reasoning as not wanting to be hostage to the vagaries of power in his home state, rather than any ‘road to Damascus’ type conversion to belief in climate change.

solar panels

As he pointed out, you don’t need to be a climate change believer to understand the many other benefits that come from having the sun generating your power for you, not least some form of insurance against possible ‘brownouts’ and the ever rising cost of conventional electricity.

In fact Australia is embracing solar panels now at a rate not seen before – installations have hit their highest point in five years with 15,000 homes and businesses getting solar panels in one month this year (March).

Queensland is leading the charge, putting in 25 megawatts in March alone – enough to power 5,500 homes and businesses, and now in Queensland 30% of private houses have solar. At this rate of installation 30%-45% of total energy requirements in Australia will be met by ‘customer-owned generators’ (ie owners of residential and commercial premises) by 2050. And nearly all of this will be solar.

Although feed-in tariffs, that is the price at which electricity companies buy back electricity from owners of solar systems, have fallen, the cost of installing solar has fallen too, with the cost per kilowatt having gone down from 46c to 22c over the four years from 2010 to 2014.

And on the global stage Australia is in the top 5 countries in terms of total residential* solar power, trailing only China, Japan and the US in total capacity, with residential solar power in Australia currently accounting for 2.8% of all power generated.

Cory Bernardi’s not the only surprise – you wouldn’t have thought it from the manufacturers of two of the biggest gas guzzling cars in the world, but both Ferrari and Lamborghini have installed solar panel arrays to power their factories. Ferrari has a huge solar array that produces 213,895 kWh a year and is almost energy self sufficient and claims a 40% reduction in CO2 emissions – the equivalent of 40,000 tonnes as a result.

Lamborghini was first to move on solar, jumping on the bandwagon back in 2009 when it installed a 17,000 sqm solar array on its factory roof which generates 1,582 MWh a year and results in a 20% reduction in CO2 emissions every year.

Any discussion of renewable energy and electricity generation would not be complete without referencing Elon Musk and Tesla and – as you might expect – he announced last month that Tesla had produced a glass solar roof tile for people who’d like to generate electricity from the sun without having to install solar panels so obviously on their roofs.

He explained that the goal was to have ‘solar roofs that look better than normal roofs, generate electricity, last longer, have better insulation and actually have a cost, an installed cost that is less than a normal roof plus the cost of electricity’. You can order your new roof on the Tesla website – yes it’s available in Australia – for a downpayment of AUD$1,310, plus you get a lifetime guarantee on the roof tiles. Not bad!

So if the time is right for you to get solar panels for your business, get in touch with our team at Ezilend and we’ll sort out the finance for you. You’ll be saving money and the planet in no time!

*this refers to all ‘customer-owned generators’ ie it includes business and residential installations

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Truck loans or drone loans?

It’s fair to say that truck technology has not progressed at lightning speed over the last 30 years. Trucks – whether small ones or ‘big rigs’ – don’t look very different today than thirty years ago. And notwithstanding some improvements in handling (if you haven’t seen the Jean Claude Van Damme Volvo commercial you should watch it here) and fuel efficiency, there haven’t really been too many big changes in technology.

delivery drone

That might be about to change thanks to a small number of tech companies, mainly but not exclusively based in the US (there’s one in Volvo’s home country – Sweden).

You’d be right in guessing that where there are potential massive leaps in automotive technology, Elon Musk from Tesla is not far away. Last month (April) he let slip via Twitter that Tesla is proposing to launch a semi truck in September. Of course the truck will be electric powered, but it will also incorporate ‘autopilot technology’ which will take a chunk of the hard work off the driver, although Tesla is still saying that a driver will still be needed, at least ‘in the short term’.

Musk is looking to address the big issue of truck driver fatigue and reduce the number of accidents attributed to this, although he admits that regulators in the US will need to see a lot of data on the safety of any new autopilot controlled truck before allowing any driverless versions out there.

There are also plans to produce a pickup truck in the next two years. He’s clearly serious about the truck side of things, having brought an ex Daimler exec called Jerome Guillen in to head up the program.

Running an electric truck has one major drawback however, pointed out by rival truck manufacturers, and that is range. Even with a huge battery array, which trucks shouldn’t have any problem accomodating in the trailer section, a purely electric truck is unlikely to be able to travel more than 500kms before running out of power, and this is a way short of what many truck drivers have to do in a day (often more like 1000kms).

Rival manufacturer Nikola Motor Company has an answer for the problem – supplement the batteries with a hydrogen fuel cell, which boosts the range to a much healthier 1600kms.

Obviously not restricted by US regulators in its home country, Swedish company Einride has a more ambitious goal than Tesla, with plans to get its fully electric and fully autonomous vehicles, called T-Pods (which can move 20 tons of cargo 200kms on a single charge) on Swedish roads by 2020. They are also hoping to roll out a ‘test fleet’ on public roads in Sweden as early as next year.

Finally, UPS is approaching new technology for trucks from a completely different direction – testing out combining their delivery trucks with drones to make deliveries quicker and reduce fuel consumption. The way it works is that a delivery truck has a drone installed in the trailer roof, and when the truck arrives at one delivery destination where there are other deliveries needed close by, the driver delivers to one location in person, while the drone drops off the other deliveries at the same time. The drone, called the Horsefly, has been developed in conjunction with drone tech company Workhorse Group, and will be fitted to new lithium-ion battery powered electric delivery vans.

Whichever way you look at it, tomorrow’s truck could be a much different proposition from today’s! And remember, when you need to buy that first fleet of drone equipped and/or autonomous trucks, give us a call at Ezilend to arrange the truck finance. We’ll get one of our robots to help you out!

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Keep your wits about you before taking up dealership finance

Don’t just take our word for it! In August last year car company BMW’s finance arm – wholly owned by the car company itself – was found to have breached many of the rules in the consumer credit code.

car dealership

In what amounted to a litany of failings, a review by Ernst & Young found that BMW (Australia Finance) had, among other things…

1) Paid much larger bonuses to their sales staff if they were able to secure a loan to a customer at a higher interest rate. In some cases the dealership could increase its commission by over $7,000 simply by getting the customer on to a loan deal with a higher interest rate.

2) Offered finance to customers even when their personal financial information was patently incorrect, for example where earnings were (sometimes vastly) inflated or where living expenses were declared at very low levels.

3) Offered loans in excess of the car’s value, meaning that the customer would still owe BMW money even after selling the car.

The end result of the review was that ASIC fined the company $697,000 and late last year ordered it to repay customers $77 million for ‘violating responsible lending provisions’.

So the moral of the story is… it’s wise to wary of the various ways in which car dealers can make you part with more money than you should when buying a new car.

So, our advice is as follows…

1) Make sure you know what your options are before you go into the dealership. Have a look at prices offered at different dealerships and check into other finance options (give us a call!). Also get an idea of what the resale value of your current car might be if you are thinking of trading it in against the new one.

2) Don’t get drawn into the excitement of the process of buying the new car. Good salespeople can take advantage of the excitement and rush things through when you should be carefully considering the offer. On no account be persuaded by the salesperson saying that the deal offered is only available ‘on the day’.

3) Have a loan pre-approved before you go into the dealership. You can show this to the salesperson to show that you are not just ‘tyrekicking’. Plus it gives you a benchmark to see whether the finance deal the dealership is offering is any good.

4) Watch out for add-on sales after the purchase – these can often be at vastly inflated prices compared to what you can get outside the dealership.

Finally… as a general rule it’s a good idea to look at the deal as a whole. Where a car dealership is offering you a very good price, make sure that they’re not making up for it with a lowball valuation of your trade-in or by jacking up the interest rate on the finance. Conversely you may be offered a very low (or even zero) interest rate, but then you will probably be paying the full retail price for the new car.

And finally… give Ezilend a call before you go car shopping – it could save you a lot of money!

You might also find these news articles interesting reading…–have-a-loan-anyway-20160815-gqswtd.html

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Camper or Caravan

Which is best for your Australian road trip?

If you’re planning a trip around Australia, you’re about to experience the adventure of a lifetime. From the wildlife to the landscapes, Australia offers endless adventure and beauty to travelers. But what’s the best way to travel around Australia?

Caravan vs Camper Trailer

Two of the most popular ways to travel Australia include by camper and caravan. Both offer advantages and disadvantages to travelers, but which is the best choice for your trip?

If you’re facing the choice between a camper or a caravan, here are a few questions to ask when making your decision.

How much space do you need? 

One of the biggest factors to consider when choosing whether to use a camper or a caravan for your Australian road trip is how much living space you will need when on the road. While campers can offer plenty of living space to lay mattresses or cots, they require you to bring along your own cooking equipment and any furniture or beds that you plan to use for your trip. You will also need to pack up these items every morning and set them up each night. A caravan, however, offers fold-up beds that pack away easily each morning and includes built-in stoves, refrigerators, and seating, which saves a significant amount of setup time compared to a camper.

Once you determine the amount of space your family or travel partners will need and the level of comfort you desire, you will have a better idea of whether a camper or a caravan makes more sense for your trip.

How long do you want to travel? 

How long do you plan to travel? Two weeks? Two months? Six months? The duration of your trip can influence the type of vehicle you decide to purchase. While campers usually cost less, they do require significant time each day to set up and pack away, which can eat into your time to explore and enjoy your trip. Caravans, however, offer more convenience and require less investment of your time.

If you’re planning a shorter trip, then sleeping on mattresses and setting up your living space each night may not prove much of a hassle. If you’re planning to be on the road for several months, however, then you may appreciate the convenience offered by a caravan.

Where do you want to go?

The types of places you want to go on your trip and the distance you plan to travel can influence whether you buy a camper or a caravan. Both campers and caravans will require you to have a tow vehicle. Between your tow vehicle and your camper or caravan, you will need a significant amount of space at your campsite each night. Caravans, particularly, require significant space to park, as well as access to power hookup. While Australia offers many nice caravan parks, you may find the locations of these parks inconvenient compared to your desired itinerary. Campers, however, are smaller, lighter, and more mobile, allowing them to access smaller sites outside of caravan parks more easily, giving you greater flexibility for where you can travel or your trip.

If you plan to do any off-roading on your trip, accessing some of Australia’s more remote and difficult to access locations, you will need a tow vehicle with four-wheel drive. While some travelers do take their campers and caravans off-roading, it can pose risk to the vehicle, requiring maintenance. If you plan to travel much off-road, you will want to buy a camper or caravan that has been specially designed for off-roading.

What’s your budget?

For most travelers, budget influences their decision as to whether to buy a camper or a caravan more than other factors. Campers are lighter, easier, and cheaper to tow than caravans, but they do not offer the same conveniences as caravans. Similarly, off-roading vehicles, whether campers or caravans, offer greater flexibility as to where you can take your vehicle, but they cost more than vehicles designed to stay on-road.

Before you decide which vehicle to purchase a camper or caravan or an on-road or off-road vehicle you will want to think carefully about the type of trip you want and which vehicle will best provide you with that experience. Then you can set to work finding a vehicle to meet those needs that fits within your budget. Good deals on both new and used campers and caravans exist, so it’s worth taking some time to ensure you find the right vehicle for you.

If you need help financing your purchase, consider caravan and camper loans to help you make your Australian road trip dream a reality.

How much does it really cost to run a car?

The cost of buying a car is just the beginning – just as important is factoring in how much it will cost to run the car. A less expensive car can end up looking, well, expensive, and what may look like an expensive purchase can end up being a lot less expensive than the alternatives 3-4 years down the track.

buying a car

Car clubs like the NRMA regularly track car ownership costs for different models and generally take into account a range of factors that can be broken down into three types – standing costs, fixed costs and variable costs.

Standing Costs

Standing costs are essentially those costs that are part and parcel of car ownership but are otherwise invisible, until you have to sell. These are the costs of depreciation – the difference between the price you pay and the sale price you get when you sell the car, and what’s called ‘opportunity interest’, which is a notional figure representing the loss of interest payments on the money you would otherwise have had (earning interest, we assume) if you hadn’t bought the car with it!

Fixed Costs

These are regulatory and related costs you have to pay if you want to be able to drive the car on public roads, such as vehicle registration and CTP insurance.

Variable Costs

Basically anything else, such as fuel, oil and other consumables and maintenance and repairs to the vehicle.

Once all of these types of costs have been assessed, it is very interesting to see the variations between different makes and models of cars and also between the types of cars. In NRMA’s analysis of vehicle running costs in 2015 they highlighted the huge difference in running costs between the Hyundai i20, coming in at just $95 a week and the Lexus LS460 F-Sport V8, costing more than 10 times that at $1090 a week.

Among the thriftiest cars identified by the NRMA there were still huge running costs differences between different types of cars – interestingly ‘light cars’ such as the Hyundai i20 mentioned above are less expensive to run than ‘micro cars’ like the Mitsubishi Mirage, and even the most frugal ‘hot sedan-wagon over $100K’ – the Audi S4 3.0 TFSi Quattro – will cost you $569 per week to run.

All figures calculated by the NRMA are for privately owned cars in NSW and based on an annual 15,000 kms travelled every year over a five year period.

It’s more expensive to run a car today, says the ABS

And, according to recent data from the ABS, the cost of running a car has continued to climb over the past 10 years, increasing by 5.2% since 2006, even though fuel is 9% cheaper than it was then, and cars are overall nearly 10% less expensive than they used to be. The main reason for the cost increase is the cost of spare parts going up 27%, cost of maintenance and repairs going up 24% and ‘other vehicle costs’ (eg registration, licence, tolls) going up a whopping 65% over the period.

But there is some good news! Although car insurance costs have gone up, the costs of car loans have gone down significantly, helped by falling interest rates. Today it is $1,300 less expensive to arrange a five year car loan on a $20,000 vehicle than it was 10 years ago.

ASIC has recently launched an app to help car buyers make the right decision – called MoneySmart Cars, it helps users work out the total costs involved in buying a car, including running costs. It might be worth downloading if you’re just about to buy a car. And then come to us to arrange the finance!

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What type of financing is most suited to me and my business?

There are essentially five main forms of financing for businesses in Australia. Which one is most suitable for your business comes down to a number of factors – in general terms businesses that are well established have a slightly wider range of options, but many of these factors are related also to what the finance is for and, ultimately, which option is most suitable to the business.

Here’s a quick run down of the options…

  1. Business loan
  2. Commercial loan
  3. Line of credit
  4. Hire purchase agreement
  5. Chattel mortgage

(read on below)


1) Business Loans

A business loan is often the very first option that lenders will put forward, however it’s worth considering whether there are any other finance options available to your business before opting for a business loan. Firstly, you may not even be eligible for a business loan from many lenders. If your business is a startup or has been running for less than two years and/or is not registered for GST, you may not be eligible for a business loan.

If you do qualify, you need to be able to show that the money you receive will be used for what are called ‘approved business purposes’. This means things like the acquisition of another business, or business expansion, or for capital purchases.

There are many business loans available with a range of different interest rates and other charges. Lenders will generally consider a business loan for amounts upwards of $10,000 – $20,000 and on up to $1,000,000 from some lenders.

The loan can be secured or unsecured. Secured loans are generally secured against either residential (ie your home) or commercial property (if you own it). Unsecured loans may be an option, but they generally command higher interest rates than secured loans. From a tax perspective, interest and other fees associated with the loan are fully tax deductible.

The loan is normally made available as a lump sum.

Things to consider with business loans…

  • Is your business eligible?
  • You pay a larger amount in interest and other fees the longer the term of the loan
  • A secured loan will cost less, but you are putting your home or commercial property on the line if you cannot repay it

Which businesses is a business loan most suitable for?
Small/Medium Enterprises that are established and that need a relatively large amount financed.

Which businesses is a business loan not suitable for?
Small or startup businesses; businesses with a very variable cashflow; where finance is for specific capital equipment items, including car/machinery etc.

2) Commercial Loans

Commercial loans are very specifically for the purchase of commercial property, either in the course of property development or another type of business. Commercial loans are offered by many lenders for the purchase of retail, industrial, residential and commercial property and are generally secured on the property purchased, unless the business applying for the loan is a large company, in which case the loan can be secured on the general assets of the business, for example the trade debtors (customers owing money to the business).

Which businesses is a commercial loan most suitable for?
Larger business wanting to buy property.

3) Lines of credit

The main difference between a line of credit and a lump sum loan is that with a line of credit the lender gives your business access to funds, genrally as an overdraft facility on a bank account, with a limit imposed on that overdraft. The main advantage is that you only pay interest on the amount you use, if it less than the limit. The downside is that interest rates on lines of credit tend to be higher.

Which businesses is a line of credit most suitable for?
Businesses that need short term finance, as long term use of a line of credit can get expensive.

Which businesses is a line of credit not suitable for?
Businesses needing longer term finance, for example for the purchase of specific, larger items of equipment such as machinery or motor vehicles.

4) Hire purchase agreements

As the name suggests, hire purchase agreements are a way of financing certain purchases by renting or hiring the item. Generally these agreements run from one to five years.

The upside of a hire purchase agreement is the ability to have the use of the equipment (often a car) while paying for it over a period of time AND the fact that the whole cost of the hire purchase agreement is fully tax deductible, which is not the case if your business buys the capital item.

The downside (if this is a downside) is that your business does not ‘own’ the equipment and that if you decide you don’t need the equipment before the hire purchase period is up, you will have to pay an early termination fee.

Some agreements allow you to purchase the equipment at the end of the period for an agreed amount, which is normally significantly less than the original purchase price.

Which businesses is a hire purchase agreement most suitable for?
Businesses that need specific items of equipment immediately.

5) Chattel mortgages

A ‘chattel mortgage’ is essentially a mortgage on a ‘movable item’ as opposed to a purchase of land or property. It is generally used by businesses needing to acquire one or more vehicles and preferring to spread that cost over a longer period of time than would be possible for example with a hire purchase agreement.

These are your main options for business finance – if you need any more help deciding which is the best option for your business, get in touch with us!

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Business Cashflow Loans

Cash is king.

Almost all businesses have a cash squeeze at one time or another. When doing your business planning a very important component is the cashflow forecast, which will identify times when your business may need extra cash to bridge a period when for example the business buys stock before it is able to supply the finished product and invoice for it. Or there may be a period when a number of bills fall due which will be covered by later earnings.

Alternatively, opportunities may present for example to purchase stock in bulk at a discount or to conduct a marketing campaign, but where the business does not have the cash in hand to fund these.

A business cashflow loan is designed to plug these sorts of gaps. Producing a full cashflow forecast for the year will be very helpful, not only giving you an indication of when extra cash may be needed, it will also be useful to show a lender what is needed and when the loan can be repaid.

cashflow loans

Most business cashflow loans are unsecured, that is they do not need security (‘security’ is where the lender requires the borrower to attach an asset – this may be a property or could be another type of asset – to guarantee the loan).

Unsecured loans are available to businesses – based on a set of lending criteria – for amounts of between $1,000 and $350,000. Applications are generally turned around within 24 hours and funds can be made available to the business within a few days and are made available either as a lump sum (ie the whole amount) immediately or as a line of credit.

If the loan is in the form of a lump sum, repayments are generally made on a regular basis over the term of the loan, which is normally one year. If the loan is instead in the form of a line of credit, minimum payments are made based on the amount of the line of credit that is actually used.

Things to consider before applying for a business cashflow loan

Before applying for a business cashflow loan, consider…

  • Will the business be able to repay the loan? Have a look at the costs involved with the loan and work out if the business will be able to afford the loan.
  • How much you can borrow. Check what the lending criteria are to make sure you meet these.
  • How quickly you will receive the funds.
  • How the repayments are structured. Lenders may be more or less flexible with repayment terms, so make sure you know what the repayment terms are.
  • What fees and other charges you will have to pay. Check if there are upfront establishment fees and any other fees apart from the interest charges. Also check what late payment and default fees would be (sometimes these are charged daily). These can make a big difference to the overall cost of the loan.
  • If the lender is a reputable operator. Research the lender thoroughly, both online and elsewhere.
  • If you fit any other conditions imposed by the lender – most loans require the applicant to be over 18 years of age and the business to have been running for longer than a certain period (generally 3-6 months). There may also be a minimum monthly sales requirement and terms relating to the lease of your premises either a minimum period of occupation and/or minimum remaining lease period.

How are these types of loans treated for tax purposes?

Interest paid on loans and overdrafts are tax deductible, just as any expenses incurred in the normal course of running the business are, such as rent, phone/internet, insurances, wages, professional fees.

What documentation will I need to provide?

Generally documentation required is not extensive. You will need to provide bank statements and financial information on your business. You may also need to provide rental documentation for your business premises.

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