When you think of commercial finance, buying an office, warehouse or other business premises might be the first thing that comes to mind.
But commercial finance can be used for much more than property.
From vehicles and equipment to working capital and refinancing existing debt, there are a range of commercial finance options available for different business needs.
Here are five common ways businesses may use commercial finance.
1. Purchasing vehicles and equipment
For many businesses, vehicles and equipment are essential to day-to-day operations.
Commercial finance can be used to purchase a range of business assets, from cars, utes and trucks to machinery, technology and specialised equipment.
Rather than paying the full cost upfront, asset finance may allow businesses to spread the cost over an agreed period, depending on the type of finance and lending criteria.
2. Supporting business expansion
Growing a business can come with additional costs.
Whether you’re opening a new location, fitting out a premises, purchasing additional stock or investing in new equipment, commercial finance may be an option to help fund expansion plans.
The right finance structure will depend on the business, what the funds are being used for and its overall financial position.
3. Managing working capital
Even a profitable business can experience periods where cash coming in doesn’t line up with expenses going out.
Working capital finance can be used for short-term business needs, such as managing seasonal fluctuations, purchasing stock or covering operational expenses while waiting for customer payments.
There are different types of working capital facilities available, so it’s important to consider the costs, terms and suitability for your business.
4. Refinancing existing business debt
Business finance isn’t necessarily something you need to set and forget.
As a business changes, its existing finance arrangements may no longer be the most appropriate fit. Refinancing could involve reviewing or restructuring existing loans and facilities, consolidating certain business debts or changing the way repayments are structured.
There may be costs involved in refinancing, so the potential benefits and costs should always be considered before making a change.
5. Purchasing commercial property
Commercial finance can be used to purchase property.
This could include an office, warehouse, retail space, workshop or other premises for your business, as well as certain commercial investment properties.
Commercial property lending can work differently from a standard residential home loan, with lending requirements varying depending on the property, business and loan structure.
Finding the right commercial finance
There’s no single commercial finance solution that suits every business.
The options available can depend on what you’re looking to finance, your business circumstances, cash flow and the lender’s individual requirements.
At Bernie Lewis Home Loans, we can help with more than home loans. Our brokers can help you understand the commercial finance options that may be available and explore lending solutions based on your business needs and circumstances.
Disclaimer
*This information is general in nature and does not take into account your individual objectives, financial situation or needs. Lending criteria, terms, conditions, fees and charges apply and may vary between lenders and loan products. Finance is subject to lender approval. You should consider your individual circumstances and seek appropriate professional advice before making any financial decisions.
