Why We Love Relationship Based Lending

Relationship based lending is not a concept that is new to Australia’s finance industry. But as our small business community saw significant periods of growth, the philosophy at the core of this concept has been somewhat lost by big lenders.

Relationship based lending is built upon the idea that finance providers should take into consideration a broader scope of information than just an applicant’s financial history. Incorporating more factors, both qualitative and quantitative, into the lenders assessment means that the funder gains a more in depth understanding of the applicant and their business. This in turn results in a more educated decision in granting funding, an important consideration under responsible lending practices.

Recent disruptions within Australia’s finance industry have resulted in an even more difficult lending landscape for small business owners, in particular franchisees. Many are finding that the finance solutions offered by traditional lenders and banks aren’t the right fit for their businesses unique and ever-changing needs. In addition to this, many banks are moving away from small business and franchise clients due to the perceived risk of the industry. This is reflected by a Banjo Small Business Finance Survey that found for every 10 SMEs applying for bank funding, only 2 were successful.

Small business owners are now turning to alternative finance providers to gain access to funding. Such providers offer more flexible funding solutions that are a better fit for the needs for an SME, and are removing barriers to finance through simple online applications and faster approval processes. Another key characteristic of many alternative lenders that is appealing to the small business community, is the focus on relationship management.

Alternative finance providers are in a unique position due to the flexibility in their financing options. This allows lenders to place a heavy focus on building and maintaining a relationship with their client, and providing funding with a view to long term sustainability through mutual support.

This is a philosophy that Cashflow It wholeheartedly adopts, with a view to not only further the opportunities available to individual franchisees through finance, but contribute to the growth and success of the franchise networks we work with as a whole. We aim to learn about the challenges faced by each network within the industry and tailor a funding solution to fit the needs of its franchisees. Further to this we actively seek out opportunities to become more involved by attending and supporting annual conferences and brand initiatives.

We hope that by us and other lenders in the industry embracing a relationship based lending model that we are able to better service the businesses we work with and help overcome any barriers to finance facing Australia’s franchisees.

Why Mobile Franchising Is Having a Moment In The Spotlight

Many looking to break into the world of small business ownership through franchising a seeking an option with low initial investment but opportunity for future growth. For a long-time mobile franchises have offered the solution.

Mobile franchising offers a broad range of benefits to its owners and operators. Initially, the buy in is often low and start-up costs are minimal without the need for a large initial fit-out. In the long term the lack of a lease and few secondary employees to pay produces lower overheads, allowing franchisees to maximise on profit. In addition to the financial perks, mobile franchising is often considered a lifestyle choice, allowing for more flexible working hours and more control.

Mobile franchisees also report having strong customer relationships, and invest little into marketing as their mobile business offers great exposure. Considering long-term growth, mobile franchisees can expand into a broader geographic market without having to invest in a second location, a known limitation of the traditional bricks and mortar model.

With all these benefits it is no surprise that mobile franchises are becoming a popular choice among aspiring franchisees. While Mobile franchises may be limited in the minds of consumers to portable dog washes or home cleaning services, this micro-sector of franchising has seen a wealth of innovation and growth.

Consumer demand for convenience is driving industry growth, and as a result the goods and services offered by mobile franchises are expanding. With pop-up markets and mobile events appearing frequently on consumers marketing calendars, the industry has responded with food trucks and and bars. Other fresh ideas to the mobile franchise market include group finesses classes, home improvement service and even innovative concepts such as within the hour alcohol delivery for parties.

Mobile Franchises offer a unique opportunity for franchisees to invest in a business that can be flexible to their lifestyle, sensitive to their budget and move with them wherever they may go. On top of this, the mobile model is better able to adapt to changing trends and consumer preferences, without the confines of a bricks and mortar model that required significant financial investment to adapt.

Top EOFY Tips

As End of Financial Year (EOFY) quickly approaches, we look at 3 ways in which businesses can prepare, and 3 things consumers can do to make the most out of tax time. No matter if you’re running a business, or working for one, EOFY can be a stressful time. Here we discusses some simple things you can do to make the process as smooth as possible.

For Businesses:

Seek Expert Advice
No matter if you’ve been in the game for years or if this is your first financial year wrap-up as a business owner, it is always important to seek expert advice. If you’re ever unsure, the best choice is to consult someone who can look over your paperwork and make sure everything is compliant.

Claim Your $20,000 Asset Write-Offs
The Australian government offers an instant write-off scheme to qualified small businesses at EOFY. Any new assets purchased that are under $20,000 and installed by June 30 can be written-off instantly, and there is no limit to the number of assets. This is a great opportunity for start-ups or small businesses looking to upgrade their equipment and don’t want to wait the usual 5 years to see the return.

Get Everything In Order
Potentially our number one tip for businesses come tax time is to make sure everything is in order. Review your cash flow to ensure any big ticket items are accounted for and take some time to look at employee contracts and superannuation to make sure everything is up to date. Whilst this might seem like a minor thing, it can help avoid any major surprises come the EOFY, and also allows you to lodge your tax ASAP and realise the returns sooner.


For Consumers:

Contribute To Your Superannuation
Not only is paying a little extra into your superannuation account a great strategy to reduce the tax you pay this June, but will help set-you up in the long-term if you make it a yearly habit. Talking with your employer about salary sacrificing some of your income pre-tax can put more dollars in your pocket for retirement and reduce the income you’re taxed on. If you can’t salary sacrifice, not to worry, you can claim post-tax contributions as deductions!

Donate To Charity
If you’ve already given a little extra to your future self-through your superannuation, why not consider giving a little something to others through a charitable donation. Doing so is not only going to help a good cause but can even have a positive impact on your tax bill. Donations are often tax-deductible and can therefore help reduce your debt or grow your refund.

Make That Big Purchase You’ve Been Thinking Of
Just as you are trying to better your position come EOFY, so are business owners. Clearing out old stock has been a long-time strategy to help businesses get a better outcome during tax time and they are not the only ones who benefit. As a consumer you can score a big discount on a range of big-ticket items in the lead up to June 30. Whilst most people think this is limited to cars and white-goods, you can even get discounts on items such as holiday packages.

Looking To Refresh Your Franchise Front?

Whether it is fitting out your first franchise, or refurbishing an existing one, funding new equipment can be a big hit to a franchisees financing and draw vital capital away from other facets of the business. Fortunately, there is alternate options to financing fit-outs and refurbishments with your hard earned capital. Financing the equipment is the smart solution that provides minimal asset risk and allows you to retain your money to invest in other elements of your franchise.

CFI Finance can finance just one item of equipment or provide entire fit-outs and store refurbishment financing for serialised and non-serialised assets. We also finance custom-made equipment.

In the past we have financed full store refurbishments for hospitality businesses, gyms and pharmacies. Some examples of equipment financed include fridges, freezers, furniture for full store fit-outs, point of sale systems and even display cabinets. Funding your new commercial equipment is a smart alternative to purchasing the equipment outright at the start, which would involve outlaying a substantial amount of money that could be funnelled into other aspects of the business to fuel growth.


Some of the benefits of having your new commercial equipment financed through us include:

  • Retaining your capital during your start-up and expansion phases. Having this capital available will benefit your business’ marketing and expansion.
  • We offer competitive rates with our rental, leasing or business loan option. Payment options are simple and manageable.
  • Unrivalled customer service available 24 hours a day, every day of the week.
  • In most cases, no personal security is required.
  • You can choose between contract terms ranging from 1 to 5 years.
  • Repayments can be 100% tax deductible.
  • The process is quick and convenient. 
  • On our rental solution, there is an option to return the equipment.

We are specialists in the franchise financing industry and our directors have more than 2 decades of experience in the sector. We aim to make the process as simple, fast and transparent as possible with an easy online application, quick service and easy to understand contract.

Store refurbishments financing, for one or more pieces of equipment or the entire store fit-out can be applied for online via our website. The process is simple and fast.

  • Then apply online on our website, sending us the quote/invoice and selecting the option that best suits you from our rental, lease or business loan solutions.
  • We will assess your application and have you approved, generally within 24 hours.
  • We’ll raise the contracts and email them to you. We’ll also pay the supplier so that the goods can be delivered to you. It’s that simple.

Whether you’re store needs a full face-lift, or just one piece of equipment replaced, CFI Finance can help.

Should You Mortgage Your Home To Buy A Franchise?

By Kate Groom from Franchise Accounting & Tax

Thinking of buying a franchise? If so, you might be thinking of taking out a mortgage to finance the business. However, a mortgage isn’t the only way to finance a franchise. In this article, we take a look at the pros and cons of using your home as security for a business loan and consider some alternatives.


You can’t start a franchise without putting in your own money, but what if you don’t have cash in the bank? In this case, mortgaging your house can help you get started in business.

It’s true that some banks will lend money secured against a business but they will also expect you to invest your own money. So, unless you have cash savings, or shares, or property you can sell, you will need to unlock some of the cash tied up in your house.

A home mortgage isn’t the only source of finance for a business, but it will usually be the cheapest form of debt. Not only are the interest rates low (compared with, say, credit card debt) but the interest is often tax-deductible in the business.


A home mortgage may be an attractive form of finance for a franchise, but it’s important to consider the downsides before you rush out and refinance your home. For instance:

Loan repayments will add to the cost of operating the franchise. Each month the business will need to cover these payments from its revenue – and you won’t have the option of not making the payments if sales are not as good as you hope for.
You could be left with a debt once you leave the franchise. Let’s say you increase your mortgage by $200,000 to buy the franchise but only repay $100,000 before you exit the business. You now have more mortgage debt than you started out with but no business income to finance this extra loan.
And the big one people tend to be concerned about … if things don’t go well, you might have to sell your house.

If you can’t afford your mortgage payments you may have to sell your home in order to repay the loan. This is as true for a business owner as for someone who is an employee. However, a business owner may find ‘crunch time’ comes sooner. Here’s why:

If you lose your job, your first option is to find another one so you can keep paying the mortgage.

But when you own a franchise it’s not so easy to find another source of income. If you can’t afford the mortgage payments you can’t simply get another job. If the business can’t be improved or readily sold, you may need to sell your house to reduce the burden of debt.


Mortgage finance may be the obvious option but it isn’t the only way to finance your franchise. In fact, the best option may be to use several different sources of finance.

In our experience there are four common sources of finance for a franchise:

Cash. By this I mean money you have saved up to invest in a business. This might be unfashionable, but it certainly reduces the financial burden on your business.

Money from a family member.

Asset finance. Several finance companies will provide finance to lease equipment or franchise fitouts. This can be a very good option.

A small unsecured loan or a credit card.

Given the risks associated with mortgage finance, a blended approach might be a very good way to go. It may take a little time to put together a blend of finance sources, but this approach can give your business a sound financial footing and help protect your home.

Kate Groom is Client Solutions Director at Franchise Accounting & Tax: Australia’s first specialist accounting firm for franchises. This article was written by Kate and first published on www.franchiseaccountingandtax.com.au

How to become a Multi-Site Franchisee

By Rachel Kurzyp

Your first franchise is booming and you’re now looking to become a multi-site franchisee, but where do you find the capital to fund your second site? And how do you ensure you don’t miss opportunities to expand your franchise?


If you’re a successful franchisee looking to expand your brand by taking on another site, there are some preparations you must do before lenders will consider funding your future business. In terms of timing, it is important to have the first store running efficiently and profitably, according to CFI Finance Managing Director, James Scurr, as lenders will want evidence that you have a proven track record with your first store before taking on additional sites.

“Having an accountant prepare your financials to ensure they demonstrate a healthy profit will go a long way in securing funding for a second or third site”, says James. “This not only shows your ability to successfully run a business, but the profit derived from the existing store will help the lender assess the serviceability of the proposed lend on the second store”.

Often franchisees use all their available capital to fund their first store. This means they may miss out on opportunities to expand and become a multi-site franchisee. One way to ensure you can take advantage of opportunities when they become available is to have access to capital.

“At CFI Finance, we fund the fit-out and equipment costs for greenfield sites and we can also free up capital by funding the used equipment in the original store”, explains James. “We can also assist you by offering a sale and lease back of the original equipment to help free up important capital”.

Another viable option for franchisees is to have their franchise system accredited. “We have an accreditation program for franchise brands where franchisees are “pre-approved” for funding”, says James. “This approval is based on a per-store basis rather than per individual. So, a franchisee can have guaranteed access to funding multiple stores simply by completing an application form and providing a copy of their driver’s license”.

One of the benefits of using a specialised financial lender like CFI Finance is that many finance products offered are 100 percent tax deductible and are ‘off balance sheet’. “This is different from many other lender products where only the interest portion of the repayments can be considered a tax deduction”, explains James.

“The idea of multi-site ownership is that revenue and profit increase, which also means that the amount of tax paid also increases. But by funding your assets with CFI Finance, you can reduce the amount of tax paid”. The same goes for using funding ‘off balance sheet’. “By not displaying the finance on your balance sheet, franchisees will still have the ability to borrow from lenders”, says James.

Read more at www.franchisebuyer.com.au