3 Reasons to Apply for a Business Loan at the EOFY
Every company knows that the end of the financial year (EOFY) is the most important time to stay on top of their finances. As the year draws to a close, businesses must carefully examine their records and identify tax deductions to save as much money as possible. However, not many companies consider applying for a loan at this time. Most are simply too busy to consider one and others simply see no need for it. Regardless, applying for a loan during EOFY comes with various advantages. Here are a few:
1. Saves money
Just like how many businesses put many of their offerings on sale on end-of-year holidays like Christmas, the same can be said for EOFY. Many companies—especially in the wholesale and retail department—reduce their prices at these times. There are varying reasons for this, such as reducing their inventories to speed up stock take or simply readying themselves to implement a new model. Suppliers may also have the same story, offering discounts for different reasons.
You can take advantage of these discounts with a loan, seeing as more cash on hand allows you to purchase products at a discount to save money. Write-offs are also possible for some purchases, meaning that you can have some assets written off almost right away.
2. Facilitates growth
Growth can be costly, depending on the scale and speed at which the increase is occurring. Companies planning to grow may have to hire additional employees to satisfy the increased workloads. They may also need to invest in more assets to increase productivity. Whatever it is they need to invest in, the money can add up fairly quickly.
Many companies take another look at their growth plans around the EOFY, meaning that it is likely you will also have set similar goals to grow your business. If this is the case, a business loan can assist you greatly. With extra money in your wallet, you can make the necessary investments without being too constrained by financials. This will allow your plans to get into action right away, setting yourself up for a profitable new financial year.
3. Utilize asset write-off
As mentioned earlier, one can take advantage of asset write-offs. Companies can invest in expensive equipment and have it instantly written off. In other words, companies can claim the full amount of the asset because they have purchased it before the financial year has ended.
If you had been in business for a while, you would understand how valuable write-offs can be. Previously, you would have had to plan for depreciation, which could last for many years. By applying for a loan and purchasing an asset during EOFY, you can instantly write it off and claim the expense.
A business loan can be advantageous, especially when received at the end of the financial year. With a loan, you can make the most out of write-offs, prepare for growth, and more. That being said, whatever it is you plan to do with the money, be sure to plan for the loan beforehand. Remember, applying for the loan will take time, and to ensure that you get the loan before the financial year ends, try to start early. This way, you can capture the best deal and receive the money to be used before the new financial year begins.
Business Loan Experts helps business owners identify the perfect business loan for their needs. If you are looking for a loan company in Australia, apply for a loan with us today!