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If you have any questions regarding any of these products and how they can help your business cashflow

Call your Pacific Finance Broker on 08 9321 2120 or via email [email protected] Copyright Pacific Finance Australia 2016

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THE POWER IN FINANCE

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INTRODUCTION

Every business owner knows that cashflow is the lifeblood of their business.

It is the thing which keeps business owners up at night. Not having enough

money in the business account each day to pay wages, suppliers, rent etc.

can be a stressful scenario and one which most business owners would

face at some time.

There may be some changes you can make to your business processes

and procedures which will help your cashflow such as; ensuring invoices

are sent to your customers straightaway, requesting down payments on

large projects, early payment incentives or following up clients who pay

late.

However you may already be doing these things and just need some

additional funds injected into your business account to either get you over

a cashflow ‘bump’ or an ongoing facility because your business is in a

growth phase and needs assistance on an ongoing basis. The good news

is Pacific Finance Australia has access to several finance products (some of

which have only been released in the past 12 months) that can put cash

into your business account quickly and easily, in most cases without real

estate security.

The purpose of this e-book is to go through each of these products

individually and allow you to compare products and hopefully find one

that suits your business and solves your cashflow problem in the short and

long term.

The key thing to remember with business loans is the more security you

give the financier, the cheaper the loan will be. Also some finance products

take longer to establish, so if you need the money quickly there are

products that provide cash within 2-3 business days and can be used as a

short term solution while a longer term facility is established.




SHORT TERM SOLUTIONS

Equipment Capital Raising

Finance Outstanding Supplier Invoice(s)

Trade Finance (Local and International)

Short Term Business Loan

Single Invoice Finance

LONG TERM SOLUTIONS

Bank Overdraft

Real Estate Equity Cash Out

Debtor Finance - Ongoing line of credit facility

Retail Merchant Advance




* Interest cost has been calculated by dividing total interest cost by amount borrowed and does not factor in time value of money

Lower Interest Higher Interest

Equipment Capital

Raising

Finance Outstanding

Supplier Invoice(s)

Trade Finance (Local

and International)

Short Term Business

Loan

Single Invoice

Finance

Turnaround time 2 - 3 weeks 1 week 1 – 2 weeks 2 - 3 days 2 - 3 days

Loan amount $50,000 - $1M + $5,000 - $500,000 $150,000 - $2 Mil $5,000 - $250,000 $5,000 - $2M +

Payback period 1 - 5 years 4 - 6 months 30, 60 or 90 days 3 - 9 months 30 - 90 days

Start repayments 1 month after

settlement

1 month after

settlement 30, 60 or 90 days

1 week after

settlement 30 - 90 days

Security for loan Equipment / Motor

Vehicles No security No security No security

Invoices you raised

to your clients

Information required Full Financial

Statements

Profit and Loss,

Balance Sheet

Full Financial

Statements Bank Statements

Receivables and

Payables ledger

Interest cost per

month* 0.8% per month 2.5% per month 2.5% per month 4.3% per month 4.4% per month



LONG TERM SOLUTIONS

*Interest cost has been calculated by dividing total interest cost by amount borrowed and does not factor in time value of money

Lower Interest Higher Interest

Bank Overdraft

Real Estate Equity Cash

Out Debtor Finance Retail Merchant Advance

Turnaround time 1 month 1 month 2 - 4 weeks 1- 2 weeks

Loan amount $20,000 - $1Mil + Up to $500,000 $250,000 - $1Mil + Up to $250,000

Payback period Interest only payment at

the end of each month Up to 25 years

When your client pays

your invoice. Normally

30 - 90 days

Daily

Start repayments

No minimum repayments

required, acts as a

revolving line of credit

1 month after settlement

When your client pays

your invoice. Normally

30 - 90 days

1 day after settlement

Security for loan Real Estate Security Real Estate Security Invoices you raised to

your clients No security

Information required Full Financial Statements BAS Statements Receivables and

Payables ledger Merchant EFTPOS Statement

Interest cost per

month * 0.5% per month 0.5% per month 1 – 1.5% per month 2.8% per month



If your business owns some existing assets such as trucks, trailers, cars,

earthmoving or other equipment you can use these assets as security for

a loan. The asset must be either owned outright or if the assets are under

finance the loan balance must be considerably lower than the value of the

assets. You can even use cars owned in personal names as security.

Important to note, the finance company will take a charge over the asset

and you won’t be able to sell it until the loan is paid back.

Information required for approval:

• Full financial statements

• List of current business loans

• Directors personal assets and liabilities

• Year, make, model of assets to be used as security

• ATO Tax portals (Loan funds can be used to payback ATO arrears)

Turnaround time: 2 - 3 weeks

Loan size: $50,000 - $1million +

Payback period: 1 - 5 years

Security required: Equipment / Motor Vehicles

The numbers:

Loan amount $50,000

Application / Set up fee $1000

Loan term 60 months

Repayments 60 monthly payments of $1,250

Total payback $75,000

Total finance cost $25,000 ($75,000 - $50,000)

Interest cost per month $416

Interest rate 0.8% per month

EQUIPMENT CAPITAL

RAISING



This finance can be used to help you pay your outstanding business

expenses. If you have an invoice which you need to pay but don’t have the

funds to pay it, then the financier will pay this invoice for you and you pay

back the money to the financier over 4 - 6 months. The extra funds can

help you take advantage of bulk purchase discounts or unexpected

business emergencies. Other uses include paying ATO arrears, staff wages

/ superannuation or rent payments. Essentially any business expense can

be financed. Paying overseas suppliers can also be arranged.


• Last 2 BAS

• Last 3 months Bank Statements

• Copies of the Invoices you want paid

• Profit and Loss

• Balance Sheet

Turnaround time: 1 week

Loan size: $5,000 - $500,000

Payback period: 4 – 6 months

Security required: No security required.

The numbers:

Loan amount $50,000

Application / Set up fee $500 (1%)

Loan term 6 months

Repayments 6 monthly payments of $9,583


Total finance cost $7,498

Interest cost per month $1,250


FINANCE OUTSTANDING

SUPPLIER INVOICE(S)



This facility will provide funds to pay one of your local or international

suppliers and give you 30, 60 or 90 days to pay it back. No repayments

are made within this period, but the facility must be paid out in full at the

end in one lump sum. Facility can be used by importers who are

purchasing goods from overseas for re-sale, or by businesses purchasing

stock or goods from local suppliers for re-sale. Effectively gives you 30, 60

or 90 days to make your sale and collect the money before you need to

pay for the goods / stock.

Information required for approval

• Full Financial Statements


Loan size: $150,000 - $2million

Payback period: No repayments until 30, 60 or 90 days then facility to be

paid back in full

Security required: No security required

The numbers:

Loan amount $50,000


Loan term 90 days

Repayments $53,750 due after 90 days





TRADE FINANCE (LOCAL AND INTERNATIONAL)



This product is a used to inject cash into your business within a 2-3 day

period. The process is simple, requires little paperwork, so the funds can

be transferred in the quickest possible time. The product requires no

property or business assets to be provided as security. The lender analyses

your bank statements for the past 3 months and determines how much

your business can afford to borrow. In most cases you won’t need to get

your accountant to prepare any financial statements, just provide 3

months of bank statements.


• Driver’s license

• 3 months bank statements

Turnaround time: Funds can be in your account within 2 - 3 working days

Loan size: $5,000 - $250,000

Payback period: 3 - 9 months

Security required: No real estate or business assets required as security

The numbers:

Loan amount $50,000

Application / Set up fee $750 (1.5%)

Loan term 9 months

Repayments 39 weekly payments of $1,782





SHORT TERM

BUSINESS LOAN



This product will turn what you are owed into cash within 24 hours. It

solves the problem of you completing a job for a client, paying your staff

and suppliers for the job, invoicing the client then waiting 30/60/90 days

to get paid. This finance product will enable you to complete a job,

invoice your client and get 80% of the value of that invoice paid into

your account from the financier within 24 - 48 hours. The remaining 20%

(less a fee) will be paid to you once payment is received from your

customer. You choose which invoices you want to get paid for sooner.

Do it for 1 invoice or multiple invoices at once. It is only suitable for your

business clients you are confident are going to pay within 90 days

because if they don’t pay within this period you will need to repay the

debt in full or provide another invoice as security.


• Receivables and Payables Ledger

• ATO Statements

• Profit and Loss Balance Sheet

Turnaround time: Funds deposited into your business account within 24 hours

once facility limit has been established. The first drawdown will take 2 - 3

working days

Loan size: $5,000 - $2million

Payback period: Your business only borrows the money from the period when

you drawdown the funds until your client pays your invoice. So payback will be

30 - 90 days. As soon as you raise another invoice you will have the ability to

take out additional finance.

Security required: You provide your unpaid invoices as security. No property

security required.

The numbers:

Loan amount $50,000

Application / Set up fee None

Loan term 90 days

Repayments Paid back when your client pays your invoice




SINGLE INVOICE FINANCE



LONG TERM SOLUTIONS



This is a pre-approved line of credit facility that is secured against real

estate. It is a very cost effective solution, with interest only charged on

funds drawn down. The interest charges will be added to the loan balance,

so there is no requirement to make repayments on the loan unless the

balance exceeds the pre-approved limit. If your loan balance goes above

the pre-approved limit, you will be required to pay down the balance so it

is under your pre-approved limit.


• Detailed background on business

• Owners / Directors personal Asset and Liability Statements

• Proof of Income of owners / directors

• Year to date financials

• Accountant prepared financials from previous financial year

Turnaround time: 1 month

Loan size: $20,000 - $1million+ (Up to 80% of real estate value)

Payback period: No fixed repayments, you pay the interest only amount accrued

daily and charged to your loan account monthly

Security required: Real Estate Security required

The numbers:

Loan amount $50,000

Application / Set up fee $500

Loan term Ongoing facility

Repayments Interest only payments of $250 at month end



OVERDRAFTS



If you or your business owns real estate you can access the equity in the

property to secure cash out if the funds are to be used for business

purposes. The maximum loan to value ratio is generally 85%. The lower

the loan to value ratio the lower the interest rate you pay.


BAS Statements

Mortgage Statements

Turnaround time: 1 month

Loan size: Maximum cash out $500,000

Payback period: Up to 25 years

Security required: Real Estate security generally up to a maximum of 85% of the

value

The numbers:

Loan amount $50,000

Application / Set up fee $500 - $750 (Up to 1.5%)

Loan term 25 years

Repayments 300 monthly repayments of $354





REAL ESTATE

EQUITY CASH OUT



It acts like a revolving line of credit and ensures that every time you raise

an invoice you have the ability to get paid 80% of that invoice the next day

without having to wait for the clients to pay. One of the benefits of the

facility is that the limit will grow with your business. So unlike a bank

overdraft which will be limited by the amount of equity you have in your

property the debtor finance will grow with your business with no cap.


• Full Financial Statements

• List of current Business Loans

• Director personal Assets and Liabilities

• ATO Tax Portals (Loan funds can be used to payback ATO arrears)

Turnaround time: This facility will take 2 - 4 weeks to set up. If you need the finance

quicker, a single invoice facility can be used in the short term giving time to establish

long term ongoing debtor finance facility.

Loan size: $250,000 - $1million+

Payback period: Your business only borrows the money from the period when you

drawdown the funds until the time your client pays your invoice. So payback will be 30 -

90 days.

Security required: You provide your unpaid invoices as security. No real estate security

required.

The numbers:

Loan amount $250,000 $1,000,000

Application / Set up fee $4,000 $6,000

Loan term 30-90 days 30 – 90 days

Repayments Paid back when your client pays

your invoice

Paid back when your client pays

your invoice

Annual fee $24,000 $40,000

Interest cost per year $23,925 $85,700

Total finance cost $47,925 $125,700

Interest cost per month $3,993 $10,475

Interest rate 1.5% per month 1% per month

DEBTOR FINANCE



This is one finance option if you are a retail outlet which processes regular

debit and credit card sales. A cash advance is provided to your business

and repayments are made as a percentage of your daily credit and debit

card sales. Because the repayments are a percentage of future credit and

debit sales, if you have a quiet day of trade the repayments will be low and

if you have a busy day repayments will be higher. So you are not burdened

by fixed repayments in quiet periods.


• EFTPOS Card Sales Statements


Loan size: Minimum $5,000 and maximum is 50% of average monthly debit and

credit card sales. Up to $250,000

Payback period: 5 months / daily

Security required: No security required

The numbers:

Loan amount $50,000


Loan term 6 months

Repayments 12% of daily EFTPOS





RETAIL MERCHANT

ADVANCE



IFBA Pty Ltd T/as Pacific Finance Australia ABN 60 108 622 644

Australian Credit Licence Number 391 682

Level 2, 1109 Hay Street

West Perth WA 6005

Contact:

08 9321 2120

[email protected]

www.pacificfinance.com.au


http://www.pacificfinance.com.au/plant-equipment/

http://www.pacificfinance.com.au/commercial-property/

http://www.pacificfinance.com.au/homeloans/

http://www.pacificfinance.com.au/boatloan/

http://www.pacificfinance.com.au/carloans/

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