Lending options for your business

Lending options for your business

Whether your business is experiencing sudden growth or financially struggling, it is crucial to manage your cash flow effectively. Cash flow gaps or being unable to access extra funds can put a real strain on a business. However, there are lending options available to businesses that can help with different cash flow needs.

Before considering lending options, businesses should draft a cash-flow projection to predict their sales and expenses such as cash in, monthly loan repayments, stock levels, set-up costs, and fixed and variable expenses. Cash flow forecasts can help to prepare for best and worst-case scenarios while allocating what times of the year extra cash are needed.

To best meet your cash flow requirements, lending might be necessary. The lending option chosen should meet your business’s needs. For example, a business credit card may be appropriate for immediate purchases and paying off smaller bills. Alternatively, a business overdraft is more suitable for larger, more frequent seasonal gaps.

Inventory management is key to good cash flow. Stock levels should co-ordinate with high and low sale seasons. For example, if you run a seasonal business where peak sales are during the holiday season, you must account for higher levels of cash to be available.

A business line of credit may be a viable option for long-term or larger purchases. A business line of credit provides lower interest rates with the flexibility of an overdraft allowing long-term access.

For business owners looking towards long-term investments to re-invest in the business, a business loan may be more appropriate. If you are seeking to purchase new equipment or business vehicles, asset finance may be suitable. Asset financing uses assets such as accounts receivable, as security interest to borrow funds.

Lending is a great way to stay on top of your finances provided that the lending solution is correctly matched to your business’s needs.


If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.

Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.

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