Options for seeking finance
Last Updated: 17 August 2021
Cash flow fluctuations
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).
Property
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.
Vehicles
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.
Machinery, equipment and tools
Need finance to purchase or replace machinery or equipment? Think about whether buying or leasing would suit your business better.
Some finance options include:
Inventory – goods you hold to sell
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:
Starting your business
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.
Growing your business
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.
Exporting overseas
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.
Research and development
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.
Business survival
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.