From little things…

From little things...

When Chris called CFI looking for a small business loan he was already fed up of trying to deal with his bank. After weeks of back-and-forth his bank still couldn’t make a decision, and wanted Chris to refinance his long term debt facility at a higher rate, rather than extend an additional small loan. Enter CFI…

Store Refurbishment

How it started

Chris had taken over a franchised fast food site in a well known network almost a year ago. With hard work by Chris and his wife, turnover had improved significantly. In fact, things were going so well his franchisor began to gently nudge about upgrading to their new flagship fitout and branding. Chris agreed the investment was worthwhile but it would require some additional funding.

CFI can provide funding for store fitouts and refurbishments.

How did CFI help?

Our team already had a great understanding of the franchise network, store formats, and the new branding. This meant there were plenty of questions we just didn’t need to ask, and less hoops for Chris to jump through.

The reason for the loan made sense, and although Chris’ bank already held primary security over the business, the clear servicing and strong character exhibited by Chris and his wife made the decision an easy one, his approval was issued within a couple of hours and funds available the next morning.

What happened next?

About a week after we settled the transaction we heard from Chris again. He’d been looking at acquiring another store in the network for some time but hadn’t pulled the trigger, obviously finance for the acquisition was a key consideration, could CFI help?

Once again we already had plenty of our standard questions answered. We knew the network and so did Chris. All we really needed was some detail around the business Chris was looking to buy and an Information Memorandum was quickly emailed over. Once again we were able to deliver Chris a fast approval and put him in a great position to execute on the purchase.

All the good stuff!

We love deals where we get to showcase some of the great things we do:

  • Fast approval & great service
  • Funding for a refurbishment
  • Worked with existing bank funding
  • Acquisition Finance

Any advice provided by CFI is general in nature and does not take into account your specific requirements or circumstances. CFI recommends obtaining professional legal and financial advice before undertaking any material business transaction, including obtaining finance.

How can we help?

Request a call-back

Let us know how and when you'd like to be contacted and one of our lending specialists will contact you at a time that's convenient.

Give us a call

Ready to chat now? Just Call 1300 659 676 and talk to one of our friendly team.

Have a question

Check out our Frequently Asked Questions with answer to the queries we get most often.

Unpacking your Franchise Finance Options

Unpacking your franchise finance options

Whether you’re starting a new franchise or you’re already in business, the myriad of finance options available can be confusing and it’s often difficult to know which finance product will suit your business best. In this article we’ll talk about some of the different financing options available and how they can be applied to some of the scenarios that businesses face every day.

First though a disclaimer, this information is intended to be general in nature and it’s always best to seek professional advice tailored to your specific circumstances. Great, now we’ve got that out of the way let’s look at some of the different finance products available…

woman-applying-for-finance-on-ipad.webp

Business Loans

A business loan can be one of the most flexible forms of finance available to a small business. Funds can be borrowed to start a new business or to buy an existing one (or for some other use within the business).

With a business loan there are usually fewer limitations on how the borrowed money can be used, and the business itself (or all of the business assets) are the primary security for the loan.

If what you’re seeking is the broadest possible use of funds, including being able to finance things like fitout costs, or elements of goodwill as well as tangible assets in a business purchase, then a business loan might the product for you.

Business loans offer the broadest possible use of funds, including the ability to finance things like fitout costs or goodwill.

Equipment Lease

With a lease you pay for the use of the equipment on either a fixed or flexible term, ranging from a few months to years. In general lease payments will be higher for shorter terms or whether there is more flexibility in the lease (like being able to hand equipment back early).

Even with longer fixed terms you can still retain a lot of flexibility with an Equipment Lease, with options to purchase, return or keep renting equipment all common at the end of the lease term.
Lease payments may be treated as an operating expense and can be tax deductible. You don’t usually get to claim depreciation but you don’t have to worry about disposal of the asset either, and you will likely have more flexibility to upgrade or return equipment if your needs change over time. GST is payable (and able to be claimed back) on the lease payments.

Whilst some leases do include things like maintenance this can vary, if you take out a lease with a bank or finance company you will probably be responsible keeping the equipment in good working order through the lease term.

If you’re looking to finance specific identifiable assets and you’d like to keep your options open to buy or return the goods at the end of the term (rather than trying to guess your plans years into the future) then an Equipment Lease might be the product for you.

Chattel Mortgage (Equipment Loan)

A chattel mortgage is still the most common term used for a loan secured by a specific piece or pieces of equipment, this could be a car or truck but could be just about anything at all really. ‘Secured by’ in simple terms means the equipment can be repossessed and sold if you default on the finance contract.

With a chattel mortgage (sometimes called an equipment loan or secured loan), you own the equipment from day one. This means you can claim depreciation on the equipment (in accordance with ATO guidelines) and you can also claim back the GST included in the purchase price. There is no GST payable on loan repayments.

If you’re looking to own the equipment from the outset and your business is able to make use of the GST and depreciation benefits then a chattel mortgage could be just what you’re looking for.

Making the most of these products

Mix / Match – It’s worth pointing out that as circumstances change your choice of finance product may change too; the product that suits one piece of equipment in your business may not necessarily suit another. So, whilst your finance provider might recommend (or approve you for) a particular product, it’s also quite possible that you can change or mix and match finance products if you need to.

New or Used – Many financiers will allow provide leases and loans for used equipment, so long as that equipment is of good quality and has enough life left in it when considered against the finance term you want. It’s common for banks to be a little tougher when it comes to terms or the amounts they’ll lend against used equipment but this is where alternative lenders can really shine.

Am I too late? – It’s quite common for businesses to use up precious capital purchasing assets and then realise they’re stretched for cash or could better use their money on business growth. Fortunately this is an easy probably to solve. Generally, you can take out a chattel mortgage against goods you already own, or enter into what’s called a sale-and-leaseback transaction if you want to lease your equipment. There may be some additional hoops to jump through if you’ve owned the goods for a long time, so it’s usually easier to get it right from the outset.

Buying a Business – Whilst a business loan is often the most natural fit when you’re buying a business it’s not the only option. Many financiers can still help you to fund the acquisition by offering a chattel mortgage or sale-and-leaseback against the tangible assets of the business you’re buying.

If all of this wasn’t confusing enough there are yet more finance products available; Finance Leases (often thought of as lease to own) and Unsecured Loans to name just a couple (and it’s common for banks and finance companies to use different terms for all these products). But it’s important not to let the terms confuse you, the key takeout is this…

There’s a finance product for almost every scenario, and the better financiers can provide you with options and tailor their products to meet your business needs. Owning or expanding your franchise business could be much closer than you think with a little bit of help, the right product, and the right advice.

Any advice provided by CFI is general in nature and does not take into account your specific requirements or circumstances. CFI recommends obtaining professional legal and financial advice before undertaking any material business transaction, including obtaining finance.

How can we help?

Request a call-back

Let us know how and when you'd like to be contacted and one of our lending specialists will contact you at a time that's convenient.

Give us a call

Ready to chat now? Just Call 1300 659 676 and talk to one of our friendly team.

Have a question

Check out our Frequently Asked Questions with answer to the queries we get most often.