Options for seeking finance

Needing assistance with cash flow is one of the most common reasons businesses seek finance. Before you go ahead, make sure to carefully analyse your business finances so you know how much you need.

Some of the finance options to help with cash flow include:

• overdraft facility
• line of credit
• fully drawn advance
• factoring
• invoice financing
• loan/cash flow lending
• trade credit from suppliers
• credit card (be careful – they should only be used to fund very short-term working capital needs).

If you need finances for a property, such as a shop front, factory, or to store your inventory, consider whether it would suit your business better to buy or lease.

Some finance options to acquire property include:

• a loan
• a fully drawn advance
• venture capital
• leasing.

Whether you need one vehicle or a whole fleet, there are a number of finance options available. Before you choose, decide whether it would suit your business better to buy or lease.

Some finance options for vehicles include:

• a loan
• hire-purchase
• chattel mortgage
• trade credit from suppliers
• leasing.

Need finance to purchase or replace machinery or equipment? Think about whether buying or leasing would suit your business better.

Some finance options include:

• hire-purchase
• chattel mortgage
• fully drawn advance
• leasing.

You may require finance to purchase stock to sell (your inventory). Do you need to pay upfront or when the goods are delivered? If you’re selling goods to businesses, it might be worth asking if larger clients can pay a deposit first to help you financially.

Some finance options to purchase inventory include:

• a line of credit
• a commercial bill.

If you're looking for finance to start a business, whether from scratch or buying an existing business or franchise, some finance options include:

• a loan
• a fully drawn advance
• venture capital
• private investors (such as business angels)
• crowdfunding
• self-funding.

Investors such as business angels and venture capitalists may expect some level of self-funding or existing equity in the business before investing.

You might need finance to help your business grow, such as improving your goods or services, diversifying your business, expanding or franchising.

Some finance options include:

• a loan
• a line of credit
• private investors such as business angels
• trade credit from suppliers.

Another way of growing your business is by exporting overseas.

Some finance options to help you export include:

• a loan
• venture capital
• bonds, finance and guarantees from Export Finance Australia - if you need help with obtaining a loan
• government grants.

To fund research and development in your business, aside from traditional sources of finance you may be eligible for government assistance.

Some finance options for research and development include:

• government grants
• venture capital
• private investors such as business angels
• the R&D Tax Incentive
• crowdfunding.

Do you need finance to survive tough times? Before you consider going into further debt, first try to improve your financial position. Some options include:

• government grants for disaster-affected businesses
• financial counselling services
• personal counselling services.

Once you have done all you can, talk to investors or a lender about finance options to improve your situation.