Even with cash available, financing the purchase of an asset could be a great option if your cash-flow can support it, because I bet there are other things you could do with your cash.
It's so important that you're prepared when going out there and getting a loan because delays in getting your documents to your broker could make all the difference.
Here's our essential checklist if you're looking to finance your next purchase:
☐ Speak with your Accountant
☐ Research your finance options
☐ Speak with your broker around your finance options
☐ Get your Business Financial Statements Ready
☐ Make sure your bookkeeping is up to date
☐ Make sure you’re not behind on your Lodgements with ATO
☐ Do you have your prior Business & Personal Returns ready?
☐ Make sure the ATO has been paid
☐ Do you have your prior period BAS statements ready?
☐ Do you have your ID Documents ready?
If you’re just starting out in your business or looking to expand your business, then finance may be more of a challenge so you may need additional documents above the ones above
☐ Business Plans
☐ Cash-flow Projections & Forecasts
Brokers and their finance companies are becoming savvier when it comes to approving finance applications. Keep in mind:
> They often want to see ATO reports to make sure you’re up to date on your lodgements, the numbers stack up with the financials and you’re not too far in debt with the ATO
> If you’ve made a loss in prior periods it’s crucial your current numbers are positive and up to date and your accountant and bookkeeper are proactive
> Low Doc or No Doc loans are available, but the interest rates are often significantly higher than typical loan options.