Small Business Finance – What are your short term funding options? (Part 2)

October 16,2017
Small Business Finance – What are your short term funding options? (Part 2)

Small Business Finance – What are your options? (Part 2)

Business Credit Cards

What is a Business Credit Card?

A business credit card is a credit card intended for use by a business, rather than an individual’s personal use. Business credit cards can be available to businesses of all sizes - from sole traders, through to publicly listed multinationals. Some of the more popular small business finance/credit cards offer reward points, frequent flyer points and lower than personal credit card interest rates. The benefit to a Business Credit Card is the convenience of paying for smaller ticket items, without relying on claiming expenses made using cash or personal credit/debit cards.

Repayments and Interest

Credit cards are usually offered with interest free periods, and can have comparatively high interest rates and fee structures. It is quite common to for interest to be charged from the date of purchase of items, or from the date that the monthly statement is issued. For cash advances, interest is usually charged from the withdrawal date.

Common Fees and Charges

Annual account fees, Reward Program fees, Late payment/dishonour fees, fees for exceeding the credit limit.

Equipment and Vehicle Finance

What is Equipment and Vehicle Finance?

Equipment and Vehicle Finance is used for financing commercial assets, such as motor vehicles, plant and equipment. With Equipment and Vehicle Finance the physical asset (the Vehicle or Equipment) generally provides the security for the finance.  The benefits to Vehicle Finance are that the borrower could expect to be able to claim the full amount of the GST as a capital acquisition on the purchase of the capital item (where GST is applicable).  Equipment and Vehicle Finance is also normally offered on a longer term, generally three to five years.

Repayments and Interest

Because of the longer terms normally applicable to Equipment and Vehicle Finance, the repayments are typically on a monthly basis, and include both interest and principal, over the life of the term. At the end of the finance period, there can be an option to pay a higher residual single payment to finalise the facility, known as a “balloon repayment”.

Common Fees and Charges

Some lenders may charge “Document fees”, application fees and facility fees, as well as the final “Balloon repayment” (where applicable).

This information is general in nature and has not taken into consideration your personal or business objectives, financial situations or needs. is not making any suggestions or recommendations to you about a particular product.