Small business finance in Australia includes all the usual elements discussed in the Small Business Funding article. That article indicates the importance of business planning for successful funding negotiations. Another article discusses Small Business Planning in detail.
The above two articles are essential reading before you start looking for finance. In the present article, Australia-specific information is discussed.
Banks seek borrowers competitively because it is their portfolio of business loans that generate most of their income. As a competitive strategy, banks develop loan products that are tailor-made to meet specific business needs.
If you look around you are quite likely to find a loan package that meets your own needs precisely. Here is a partial list of Australian banks:
A review of the above bank sites should give you an idea of the kind of loans banks offer. With this information, you should discuss your needs with the banks in your locality. Take your business plan with you and be prepared to substantiate all the assumptions underlying the plan.
Obtaining premises and equipment on lease could avoid heavy initial expenditure. It could be just what you want to meet your situation. However, lease terms could vary from financier to financier and some could even be highly disadvantageous to you. Consult with your lawyer before you sign the lease deed.
Locate the property or equipment needed for your business. Next locate a reputable leasing company to finance its acquisition. Hire purchase companies could help you buy office equipment and other lesser cost requirements on similar terms.
Grants could be an important source of small business finance in Australia. The Australian government offers non-repayable grants under different programmes. One thing to remember, however, is that grants are not available to all businesses or for all purposes. You have to determine carefully whether your small business would qualify for any of the grants.
The following sample would give you some idea about assistance programmes:
- AAA: A package of assitance to enhance competitiveness in agriculture, fishery and processed food industries;
- BDP: Promotes indigenous economic development by helping indigenous people to acquire or develop successful enterprises;
- EPICS: Assists book producers take up innovative technology, improve business practices and organise training and skills development;
- ITOL: Meant to accelerate B2B – Business to Business – e-commerce solutions;
- New Apprenticeship Scheme: Incentives and subsidies to help employers reduce the cost of training;
- NEIS: A package to assist unemployed persons establish viable new businesses. In addition to management training, and help with business planning, the programme involves paying 52 weeks of allowance to the entrepreneur;
- RTP: Funding for projects of tourism development significance; and
- Small Business Answers: Meant for organisations providing advisory services to small business owners, particularly in regional areas.
The above list is only a sample. You could investigate whether your business idea could receive a grant (or a tax/duty concession discussed in the next section) by starting at Business Entry Point home page and going to ‘Grants and financial assistance’ page. Another source is Grants Page of Business.Gov.Au.
You would be able to learn how to prepare a grant application. You could also go to nearest BEC office for personal help.
Tax concessions should also be considered as a category of small business finance in Australia. Without these concessions, you would be paying higher amounts as taxes and duties. Some of these are mentioned below.
- ACIS: Under Automotive Competitiveness & Investment Scheme, registered participants receive import duty credits which can be used to pay the customs duty on eligible imports;
- CIM: This program provides import duty concessions for certain imported raw materials and goods that improve the competitiveness of Australian industry;
- Corporatewear Register: Register non-complulsory occupational clothing and avoid liability under Fringe Benefit Tax; and
- Tradex: Import duty exemption on imported goods for re-export or as inputs for exported goods.
Business Plan Development
Almost all sources of small business finance in Australia (excepting your own savings and borrowing from friends and relatives) would require you to produce a detailed business plan. If you are a new entrepreneur, you might have difficulty in preparing a proper business plan. In such a case, you could seek the help of Business Enterprise Centres and other support organisations. See the separate article on Australia Government Support for Small Business for details of such assistance.