Freeing your business from property security

If you’re a small business owner whose funding is tied to your personal property, you’ll know the uncomfortable feeling that can cause.

A lack of cash prevents businesses from growing, but putting the family home or investment property on the line to raise a loan is never the best solution.

Fortunately, there are other strategies to explore that can free up the cash you need to hire more staff, get more equipment or invest in better premises.

Cash flow improvement tips

There are many basic cash flow strategies that work for businesses large or small. These include invoicing early, being proactive with late payers and offering customers more ways to pay.

For a full range of our cash flow management tips, read our Business Owners’ guide.

Alternative funding options

However if you’re in need of a larger injection of funds to fuel your business growth, simply tidying up your cash flow might not cut it. Now is a great time to look beyond property secured funding.

Invoice Finance

Research shows that Invoice Finance is by far the most popular of all alternative lending options for SMEs ahead of merchant cash advances, P2P lending, crowdfunding and other online lending types.

Also known as Debtor Finance, this option is similar to an overdraft but instead of using bricks and mortar, the security is your invoices. This is an attractive option for growth businesses that sell on credit terms and need to bridge a cash flow gap.

With Invoice Finance, you receive an advance on invoices already owed and the amount of funding available grows in line with sales, rather than being limited by the value of real estate that is unrelated to the business. Having cash flow certainty means you can negotiate supplier discounts for early payment or take on big new clients, confident that purchases can be made and staff paid.

Selective Invoice Finance is perfect for short terms or urgent funding. Instead of using your whole invoice book to raise funds, you can pick and choose which invoices you want funded. It’s a great way to see if Invoice Finance suits your business, and it is also a popular option for seasonal businesses.

Trade Finance

Trade Finance is a flexible, short-term borrowing facility that allows business owners to purchase stock linked specifically to an import or export transaction.

P2P/Crowdfunding

Present your idea online and get potential customers or others who like your idea to invest in it. The Federal Government has a handy resource to see if this is a potential way to fund your business idea.

Equity Finance

With equity finance, money is provided to you in return for a share in owning your business. The advantage of this option is that it does not incur debt that needs to be repaid, but the part-owner will take a share of your profit. This can also be a great way to bring new skills and insights into your business. But it takes time and money presenting to investors and keeping them happy.

Online unsecured business loan

The new breed of online lenders offer advantages such as faster access to money, with less stringent loan conditions, compared to the banks. Because the money is unsecured, this access comes with higher rates and fees.

To find out in more detail about these options, read ASBFEO’s guide to alternative lending.

These alternatives to property secured funding are also attractive to Millennials or other entrepreneurs who may not have property to provide as collateral – this will be an increasing issue as the “smashed avocado” generation matures into business ownership and home ownership rates continue to fall.

We offer a range of flexible finance solutions to help businesses access the capital they need to grow. Speak to us today to explore your funding options.

Feel free to contact us for anything that relates to your business finances so we can help with your success.

4 Pickett Drive , Altona North, VIC 3025