Tips To Kick Start The Financial Year With Small Business Loans
The end of financial year (EOFY) is where everyone is suppose to get their financial advice, make purchases that will yield tax deductions and plan for the year ahead. For a lot, that means getting a business loan so they can complete the purchases before the EOFY. But what about the new financial year? What do you do to start the year off with a bang?
It’s the best time to make decisions about how your business will operate for the year ahead. Do you want to expand? Maybe start an ad campaign to grow. Or hire temporary staff for the busy season. Maybe business is going great, but cash flow is getting tougher. What if you get an unexpected expense. Maybe you’re going so well you may have a tax debt.
The fact is, there’s a lot to be done at the start of the financial year for small businesses at the outset of a fresh financial year. Small business loans may be just the answer to go to the next level.
Plan Ahead To Offset This Year’s Tax Debt
Were you able to take advantage of EOFY sale? If you did, that’s great. This meant making business purchases which are eligible for deductions to offset the past year’s taxes. What about this year?Appropriate purchases this financial year will also be eligible for tax deductions. With the EOFY come and gone, everyone now has time on there side to plan out the year carefully.
There is time for due diligence and comparison shopping for the products and services they need. Of course, they’ll need to ensure they’re making purchases that are legitimately tax deductible. Accountants may be flat out starting their clients tax returns. However they should always be willing to spend time on your future finances. Looking forward makes more sense than looking back. Small business loans can make the coming year a whole lot easier to manage.
Prioritise Loan Applications Before Tax Returns
Tax planning is an on-going exercise. This is especially true if you are expecting a tax debt or have previously had one. Submitting your tax return on time is always a must. However, every small business needs to understand one thing. Once a small business has a tax debt, lending options become more limited. Many small business clients have struggled because of this. Banks will potentially turn you away if you have an on-going tax debt. For small business clients, secure your small business loans before your taxes are due. Take out your small business loans to cover any tax debt now. This will help put you in a good credit position. Allowing you to secure longer term financial support for your business from a larger range of lenders.
Understanding Options For Small Business Loans
Many banks offer competitive rates on their small business loans. However, they usually have tough requirements for many small businesses to meet. Such as:
- Time-in business: Generally the banks like you to have at least two years in the current business
- Completed, up to date documentation: Full current tax returns, balance sheets and financial statements.
- Security: Banks like to secure your small business loans with high value items such as machinery, a car or a house.
- Credit: A good credit history and no tax debt.
Lately however, many alternatives have appeared in the market place. There are many reputable and responsible online and short-term lenders. These lenders will look at your cash flow and ability to repay any small business loans. Not just your asset backing.
There Are Lenders That Will Listen
There are many experienced lender that specialise in small businesses loans. Many are set up to assist where banks and long established lenders can’t. Perhaps you need a lender that supports business clients operating for less than the two years. You might also need a lender that accepts fewer documents and doesn’t require collateral. Rest assured they exist!
Online application forms are great. They give a quick turnaround on the approval decision They also provide quick access to the funds. But a lot of online forms are backed by an in built algorithm that says “No” much more often than it says “Yes”. This is because they are only looking at your numbers, not your story. If, as a small business owner you have a lower credit score, obtaining small business loans can be tough. You need to find a lender that will actually listen, not be ruled by an algorithm.
Don’t believe the naysayers with all their doom and gloom. It is tough obtaining small business loans. However there are many lenders out there supporting small businesses.
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