Commercial Finance: What Can You Use It For?

When people think of a finance broker, home loans are often the first thing that comes to mind.

But finance isn’t just about buying a home.

For business owners, the right finance structure can help with everything from purchasing equipment and managing cash flow to expanding operations or buying a commercial property.

At Your Finance Broker, we can assist with a range of business and commercial finance solutions, helping business owners understand their funding options and find lending that suits both the immediate need and the bigger picture.

What is commercial finance?

Commercial finance is a broad term covering lending used for business or commercial purposes.

Unlike a standard home loan, business and commercial lending can vary significantly depending on what you’re financing, how long the business has been operating, its financial position, the security available and how the funds will be used.

That’s why there isn’t necessarily one type of “business loan” that works for every situation.

What can business and commercial finance be used for?

Depending on your circumstances and lender requirements, finance may be available for a wide range of business purposes.

Purchasing equipment and vehicles

Need a new vehicle, machinery, tools or equipment?

Asset and equipment finance can allow businesses to purchase the assets they need while preserving working capital for other expenses.

Different finance structures may be available depending on the asset, business and intended use.

Managing cash flow

Even profitable businesses can experience periods where money coming in doesn’t perfectly align with money going out.

Working capital finance may help businesses manage short-term cash flow requirements, seasonal fluctuations, supplier payments or other operating expenses.

Growing or expanding your business

Growth often requires investment before the additional revenue arrives.

Business finance may be used to support expansion, purchase additional stock or equipment, complete a fit-out, open another location or invest in other areas of the business.

The important part is making sure the finance structure suits both the purpose and the business’s capacity to repay it.

Buying commercial property

Business owners may also consider purchasing the premises they operate from or investing in another commercial property.

Commercial property finance works differently from residential lending, with lenders considering factors such as the property, business financials, proposed use, deposit or available equity and overall lending structure.

If purchasing business premises is part of your longer-term plan, it can be worthwhile exploring your borrowing options before you start looking for a property.

Refinancing existing business debt

As businesses change, their existing finance doesn’t always change with them.

Reviewing current business loans may identify opportunities to restructure debt, consolidate facilities or better align repayments and loan terms with the needs of the business.

Funding an opportunity

Sometimes an opportunity arises before a business has accumulated the cash required to take advantage of it.

This could involve purchasing stock, securing equipment, undertaking a fit-out or funding another strategic business expense.

Depending on the circumstances, a business loan or commercial finance facility may provide access to funding while allowing the business to retain cash for day-to-day operations.

Business loan, asset finance or commercial loan?

This is where business lending can become confusing.

The most appropriate type of finance will depend on what you’re funding and why.

Asset finance may suit the purchase of a vehicle or equipment. Working capital finance may be more appropriate for cash flow requirements. A term loan could suit a longer-term business investment, while commercial property lending has its own lending and security considerations.

Rather than starting with a particular loan product, it can be useful to start with the business goal and then consider which finance structures may suit it.

Can a finance broker help with commercial and business lending?

Yes.

A finance broker isn’t limited to residential home loans.

At Your Finance Broker, we can assist with home and property lending as well as business loans, asset and equipment finance, working capital solutions and commercial finance.

Our role is to understand what you’re trying to achieve, review suitable lending options and help navigate the application process.

For existing clients, it also means we can look at your lending more broadly rather than viewing your home, investment and business finance completely separately.

Planning your next business move?

Whether you’re replacing a vehicle, investing in equipment, managing cash flow, expanding your business or considering commercial property, understanding your finance options early can help you make a more informed decision.

You don’t necessarily need to know which type of loan you need before getting started.

Tell us what you’re looking to achieve, and we can help you explore the finance options that may be available.

Looking for business or commercial finance? Speak with Your Finance Broker about your options.

Credit criteria, fees, charges, terms and conditions apply. Finance approval is subject to individual circumstances and lender requirements.