Small-Business-Loan-Form

How to get a business loan

Banks and other lenders offer a variety of loans, so make sure you investigate your options and find a loan that suits the needs of your business.

Deciding how much to borrow

Consider what source and type of finance will suit your needs.  The method of funding and term of the loan should match the purpose for which the loan is being used. 

Think realistically when assessing your financial needs.  Consider initial set-up costs.  Estimate how long before your business is likely to be self-supporting.  You should be able to demonstrate that you will be able to repay the loan, taking into account potential risks such as lower than predicted sales or interest rate increases. 

Applying for a loan

If you are starting up a new business and need to apply for a loan, the lender will require the following information from you: 

  • A description of the products and/or services you intend to provide
  • A marketing plan showing how you intend to bring in business
  • Evidence of the demand for your products and/or services.

You will also need to provide details of your own qualifications (both business and educational), previous business experience and past achievements.

Obviously, the amount you need to borrow and the purpose for which the loan would be used will need to be communicated to the lender, and repayment terms will need to be clearly established. 

If possible, financial information such as sales and profit projections over the term of the loan should be provided to the lender together with a cash flow forecast, showing the loan repayments, for the 12 months ahead.

Likely, the lender will seek security from you to protect the loan and this can vary from one lender to another and will depend on the type of loan and amount to be borrowed.  Some generally acceptable forms of security are:

  • real estate
  • shares in public companies
  • a personal guarantee.

Your loan application is more likely to be successful if you provide the lender with a well written Business Plan which includes: 

  • your business goals and objectives
  • results of your market research which support your financial projections and anticipated borrowings
  • systems you intend to implement to enable you to monitor your business and respond to changes in your financial position.

YOUR ACTION PLAN

  • Have your Business Plan ready.
  • Prepare financial information including a cash flow forecast.
  • Seek expert advice. We can assist you.
  • Decide on a form of security
  • Speak with a finance broker

Contact Wood Accounting team today. We have numerous finance broker connections who are experts in Business Finance

Artboard-2323213_800x480_acf_cropped

All you need to know about Single Touch Payroll (STP)

Our friends at Xero have written a comprehensive blog article explaining STP. Rather than re-hash this info we are linking over to their blog.

For our current Xero clients we are working through our list and offering assistance, for a small fee, with reviewing payroll and registering for STP.

Single Touch Payroll explained

ATO also have a comprehensive section of their website dedicated to STP. We welcome STP as we feel this will even the playing field for businesses. STP will force ALL businesses to report their PAYG tax and Super obligations to ATO each pay run rather than at end of quarter or end of year. This will give ATO more visibility on those employers not meeting their obligations allowing them to take earlier action against those breaking the rules.

Does your business run STP compliant software?

IF you are running Xero you certainly do have STP enabled software. Many other software providers also have STP ready software.

If you are not sure give us a call and we can get you organised before the due date.

business-for-sale-pic

Should I buy a business?


Advantages

Buying an existing business offers a sense of security because you have a good idea of what you’re getting for your money.

Existing customers and goodwill

An established business will generally come with existing customers, clients, suppliers and staff. This eliminates much of the effort and expense needed to generate goodwill, branding, advertising and hiring staff.

Expenses and finance

The business is already operational and stock is already on hand, so your initial expenses would be minimal and you can quickly generate a cashflow. If you need to obtain finance, it may be easier because the business has a proven track record.

Training and assistance

First-hand experience is valuable and the previous owner and employees remaining with the business are best placed to give you the training and assistance you need.


Disadvantages

An existing business does not come with a guarantee of future success!

Goodwill may not last

There’s a risk that customers and clients may leave when the business changes hands. Staff may wish to leave too and you may have to pay their entitlements, such as long service leave. The departure of the owner may have a negative effect on the business, so you can’t necessarily guarantee the profits.

Reputation

The business may have a bad reputation or have made a poor impression in the past – this might prove difficult for you to turn around.

Premises and equipment

The premises may be inadequate and the equipment or stock may be out dated or in need of replacing or repair.

YOUR ACTION PLAN

Thoroughly research the business!

For expert advice on buying a business, make an appointment to talk with your accountant, solicitor or business adviser.

Contact Wood Accounting team today on
1300 098 852 for assistance with this Action Plan!


opengraph

Convert to Xero

Xero

Xero is an online accounting system that runs in your web browser on any internet enabled device. You can run your business accounting functions from your smartphone or tablet. Invoice, quote, track expenses without having to install any software.

We recommend Xero as it is tried and tested solution that suits almost all businesses big or small. We use it in our business.

Xero is the future of accounting. Get on board and change the way you do business.

Converting is simple!

•Optimize your current file – ensure debtors and contacts are up to date,
•have us review your file,
•pick a conversion date and we are ready to go.

Register your interest here and we will contact you to organise a needs analysis and a quote. Once we have your file it should take less than 4 days to have you fully operational in Xero.

Why convert?