Did you know that your good credit rating could be the foundation of access to a Low Doc Equipment Finance facility?

Did you even know that such a product exists?

With the pressure of actually running their businesses, keeping on top of constantly changing Government regulations, and navigating through the vagaries of the economic cycles, many SME’s simply do not manage to keep their books, and therefore their Financials, up to date. In fact, Tax Returns, both business and personal, are often left to the very latest possible date for lodgement.

As a result, traditional sources of equipment finance, and finance in general, are often unavailable, leaving Business owners in the unenviable position of having to decide between competing priorities for their hard earned cash.

Hence Low Documentation Leasing to the rescue! Problem solved!

With a clean credit record, evidence of reasonable equity in property, and a minimum of three years in business, up to $35,000 can be accessed for the acquisition of a wide range of new Equipment for use in the business (and up to $100,000 in the case of Motor Vehicles), and all without the need to rush around bringing your Financials and tax returns up to date before time.

For more information on Low Doc Leasing, contact the experts at eChoice Asset Finance etc.

The 2011/12 Federal Budget purported to provide some degree of benefit to the SME segment, by way of:
A reduction in the Corporate Tax rate to 29%, effective as of 1st. July 2012 (a small benefit but still some 12 months off)

The ability to immediately write off assets costing up to $5000 ( but again not until 2012/13)
In effect, the Government has given itself the means to appear to be supporting small business, whilst allowing for the removal of these benefits if they get their 11/12, and 12/13 Budget forecasts horribly wrong!

Additionally, and seemingly with little reference to what SME’s are actually concerned about (interest rates, proposed carbon tax, fuel prices etc) they have done little to address the two-speed economy, creating a degree of nervousness which has affected both Consumer and Business confidence.
So, how does an SME “protect” themselves against the uncertainties facing them over the next couple of years:
Firstly, make a Plan! Any level of planning for the future is likely to be better than none, and may well result in an epiphany, leading to a greater level of stability or success.

Be Realistic! When setting objectives, enthusiasm has sometimes to be tempered with reality. Get a “second opinion” from someone you trust (Family, Friend, Advisor, Mentor), to ensure that you are prepared for the upside, but not surprised by the possibility of failure.

Learn how to collect what is owed to you! One of the quickest ways for a business to fail is for it to fail to collect from outstanding Debtors. Remember, you are not a “Bank”, and your Customers should not be using your “free” money, whilst you pay off your overdraft. Enlist professionals to help if it appears that you are failing to make headway in this area.

Read Widely! There are any number of publications, including online media, which cover Small Business issues, and provide insights and ideas, any one of which could make a positive difference to your business.
Join a Networking Group! You would be amazed at how much information gets shared, and reciprocal business is done amongst the memberships of these groups. Well worth the price of a monthly/quarterly Breakfast or Lunch.

Finally, look around for alternatives to your ‘traditional” sources of finance. The MYOB April Business Monitor Survey found that 51% of SME’s wanted greater assistance with business finance, having been the most neglected business segment in the past three years.

However, Leasechoice have developed an analytic which is used to assist clients to make the right decision, and avoid costly misjudgements.

The “Cash v Lease” analysis takes into account factors such as:

• Depreciation
• Inflation rate
• Internal Rate of Return
• Term of Lease

to produce a Cost benefit comparison between use of an Operating Lease, and paying Cash for the equipment.

In the analysis below, based on a clients need to replace Office Furniture at a cost of $60,000, and using a modest IRR of 12%, the client would be more than $21,000 better off over 5 years, a benefit of over 29% when compared to the cash purchase alternative.

If you have a significant Asset purchase in mind, and would like to have a similar analysis run for your company, please contact :

Michael Levin
Sales Director
Leasechoice @ michaell@leasechoice.com.au

There are over a dozen major Equipment Financiers in the Australian market, each with their own Lease products, and differing credit and asset criteria.

Unless you have direct access to each and every funder, choosing a suitable Lease product can be a daunting task!

In a “normal” market environment, companies can expect to be able to lease almost anything, from a telephone system, to a Golf cart. However, the post-GFC equipment finance market is anything but normal, and finding a home for what might appear to be a straight forward lease request might prove to be anything but simple!
Working through Leasechoice eliminates the need to become an “instant expert”, by providing access to the full suite of lease products, and funders, including its own unique offerings, thereby saving time and avoiding frustration, and allowing clients to concentrate on their businesses, and making money.

For further information, contact:
Michael Levin on (02) 9240-8253 etc etc.

As a result, some Small to Medium Enterprises (SME’s) are finding trading conditions harder to predict, and Sales slower to bring to fruition, with a consequent impact on Cash Flow.

Business Owners, are therefore, becoming more cautious about their own expenditures, and are often choosing to delay or defer necessary Capital Expenditure (CapEx) until conditions improve, or certainty returns to their particular Industry.

Whilst seemingly prudent, this approach can often be a negative for the business, as inefficient or old capital equipment remains in place well beyond its “use by” date, with a consequent “drag” on Turnover and Profitability.

A Business which takes the opposite, and pro-active viewpoint, may be able to capitalise on the inertia of its competitors, and build its own sales and profits whilst others sit back and wait.
In order to upgrade necessary equipment, whilst preserving Capital and managing cash flow, astute business owners are looking more closely at the benefits of leasing.
A business which Leases the better part (or all) of its Capital Equipment is often making one of the smartest decisions possible, particularly where that entity either produces goods for sale (Wholesale) or is a re-seller (Retail).

Companies whose success depends on turning over stock, and making a healthy profit margin in doing so, often have significant capital tied up in non-productive, Depreciating assets. How much better off would they be by Renting the manufacturing equipment, Office technology, or Retail Point of Sale systems, and then investing their available funds in more raw materials, or stock for their shelves? How many more times could they turn over their stock, making the same GP each time, whilst avoiding the Balance Sheet debilitating effect of Depreciation!

Many businesses still make the mistake of thinking that “ownership” of an asset is necessary to enable their business to maximise its utility. Nothing could be further from the truth, as often the most productive and useful assets are those which are regularly replaced and upgraded, to ensure that they are performing at peak efficiency. A large quantum of these assets are employed within a business under an Operating Lease /Rental facility, ensuring maximum Tax effect, and maximum flexibility.

In the Service Industries, whilst capital equipment is rarely a feature, the ability to “rent” the IT, furniture, and telephone systems, may well enable the business to deploy the freed-up capital to employ other support staff, enabling the Professional staff to concentrate on fee generating activities, and this theme can be replicated in virtually all types of Industry or endeavour, bringing us back to the point, that Leasing productive assets can be one of the Smartest decisions a business can make!

Companies whose success depends on turning over stock, and making a healthy profit margin in doing so, often have significant capital tied up in non-productive, Depreciating assets. How much better off would they be by Renting the manufacturing equipment, Office technology, or Retail Point of Sale systems, and then investing their available funds in more raw materials, or stock for their shelves? How many more times could they turn over their stock, making the same GP each time, whilst avoiding the Balance Sheet debilitating effect of Depreciation!

Many businesses still make the mistake of thinking that “ownership” of an asset is necessary to enable their business to maximise its utility. Nothing could be further from the truth, as often the most productive and useful assets are those which are regularly replaced and upgraded, to ensure that they are performing at peak efficiency. A large quantum of these assets are employed within a business under an Operating Lease /Rental facility, ensuring maximum Tax effect, and maximum flexibility.

In the Service Industries, whilst capital equipment is rarely a feature, the ability to “rent” the IT, furniture, and telephone systems, may well enable the business to deploy the freed-up capital to employ other support staff, enabling the Professional staff to concentrate on fee generating activities, and this theme can be replicated in virtually all types of Industry or endeavour, bringing us back to the point, that Leasing can be one of the Smartest decisions a business can make!

Often these decisions, or rather “non-decisions” revolve around important pieces of business infrastructure, such as a much needed new IT system, or an upgraded Security system for office or factory, or a new piece of automation to help reduce costs and improve profit margins.

Equipment Finance (Leasing) offers a solution to this dilemma! By acquiring the capital asset under a Lease arrangement, initial expenditure is minimised, whilst costs are spread over the longer term. The required equipment can be put to work immediately improving business performance, whilst the cost can be spread over terms up to 60 months.*

Additionally, all or part of the Lease costs can be tax deductible, dependent upon the lease product chosen, and cash which otherwise might have been spent on acquiring a depreciating asset, can be spent on developing the business, or purchasing more stock to sell.

Leasing should be part of every businesses cash flow management plan, and should be viewed as a serious alternative to cash purchase, particularly where a higher and better use of funds can be identified!

So, if your business could do with an equipment “makeover”, and you have been putting it off for no good reason, talk to the experts at Leasechoice, and see what alternatives they have to offer to resolve your problem.