How Linx Brokers can Help Your Business

February 22, 2023

The Australian lending market is flooded with many different types of loan products, and this poses several questions for hopeful small business borrowers, especially those who are time poor (and who isn’t?): What kind of loan product do I need? How much can I afford to borrow and repay? Where can I get the best […]

How to finance your primary production equipment needs

February 2, 2022

Australia’s primary producers have a track record of consistently increasing production over the past five decades. According to the Federal Government, Australian agricultural production reached a record $66.3 billion in the 2021 financial year, of which $47 billion was exported. And the outlook remains just as strong. The Federal Government expects agricultural production to increase 18% in the 2022 financial […]

Managing your transport risk across the Chain of Responsibility

August 27, 2021

Whether you’re behind the wheel of a heavy-duty truck or responsible for loading its freight, each member of the transport supply chain has a responsibility to keep each other safe. Risk management and insurance go hand in hand, and we should all collaborate to reduce the hazards facing drivers each day. But has the pressure […]

The Skyrocketing Pre-Owned Equipment Market

May 5, 2021

One of the pandemic’s ongoing effects is the shortage of new machinery and business equipment available for purchase in Australia. This has caused disruption in many industries including agriculture, construction, earth moving and manufacturing.

As a result, many businesses have turned to pre-owned equipment, driving increased competition and a surge in prices.

Lingering effects of the pandemic on supply chains

Due to employee lockdowns and social distancing requirements, production from overseas factories has slowed considerably and there have been interruptions to the raw material supply chain.

Equipment now in high demand

Extensive rains, easing drought conditions and a bumper grain harvest have added to local demand for agricultural equipment, resulting in shortages and increased prices.

Meanwhile, the global pre-owned construction equipment market is being challenged by a surge in activity and an increasing focus on modern machinery to replace human labour. Combined with this, the additional pressures of major infrastructure projects and the Homebuilder scheme have resulted in huge strain on the Australian pre-owned equipment market.

Higher prices and better clearance rates are also being seen at farm clearing sales. COVID-19 has accelerated the move towards online sale of pre-owned agricultural equipment at sites like AgTrader, and Machines4U.

Benefits of opting for pre-owned equipment

In addition to increasing the size of the equipment pool available and reducing delays on the completion of projects, pre-owned equipment will lose its market value more gradually than a brand-new item, which depreciates the moment you take possession of it.

If in good condition when you purchase it, pre-owned equipment can be particularly useful for short-term projects, or for testing new markets and can provide cost-effective service for many years.

Things to watch for when buying pre-owned

In some cases, buying pre-owned equipment requires much the same research and caution that you would use when buying a brand-new item, such as reading some online reviews for the specific product you are considering, and if you’re buying from a dealer, checking their reputation and references before you proceed.

Additional precautions include:

Make sure you’re actually saving money. Under normal market conditions, you should pay less than the new price when buying pre-owned equipment. An online search for the new model will help you calculate a realistic secondhand price.
Check the item’s condition. It may be pre-owned, refurbished, or remanufactured, or could even be a never-used fire sale or residual stock. If buying online, always ask for photos and exact details.
Ask for a warranty. If you’re buying from a dealer you may be able to get a warranty included in the purchase price, or pay for an extended warranty. Also check the dealer’s refund policy in case you’re not satisfied with your purchase.
Work out a shipping method and cost. An online purchase may involve long-distance shipping. Investigate how much will it cost, and how long will it take. You may be able to save time and money by picking it up yourself.
Dispose of your old equipment. A dealer may allow you to trade in your old equipment (if it still has a market value), to help reduce your purchase cost. Otherwise, consider retaining your old equipment as a source of spares which you can use, or sell online.

So how can we help you?

Getting the right finance for pre-owned equipment can have its challenges. With the high demand and increasing prices, having the backing of your broker will give you pain-free access to the best pre-owned equipment finance options available. Contact us today to find out more.

Are You Up With the Federal Budget’s Impact on Your Agribusiness?

March 16, 2021

Are you up with the federal budget’s impact on your agribusiness?

Reactionary, short-term and expansionary. That’s what the CPA Australia has called the 2020-21 Federal Budget, which was released belatedly due to the coronavirus pandemic, in October last year.

But, where does it leave agribusiness?

Here are the highlights and lowlights, plus the update issued just before Christmas.

How it benefits you

Agricultural businesses can expect to enjoy easier exports, drought support, live-export compensation and measures to address worker shortages. Some of the most popular budgetary moves include:

Personal income tax brought forward
A one-off payment to cover disruption
Much-needed relief on interest payments on loans
Direct subsidies to most-impacted areas.

The expansion of the instant asset write off tax break is a highlight for agribusinesses with a turnover of under $500 million. There’s no cap, and it will be available for the next two years. This impetus to the sector to invest is expected to stimulate local economies. The government has also introduced carry-back provisions. For the finer details, visit the Australian Taxation Office.

Agribusinesses could benefit from the $328.4 million package for easier navigation of the export system. That includes slashing $35.2 million in red tape specifically for the meat, live export, seafood and plant industries. Funding will also be available to producers who’ve suffered from the 2011 live cattle exports ban to Indonesia. They will be able to access compensation and cover their legal costs.

Another highlight is $1.5 billion over five years for the Modern Manufacturing Strategy for competition, scale and resilience. Food, beverages and medical products are the agribusiness focus areas.

Keeping things flowing

The National Water Infrastructure Development Fund was given $2 billion, which will fast track projects such as pipelines, dams, weirs and water recycling plants.

Also, $270 million will be pumped into the Murray Darling Basin Plan, and there’s $155.6 million for drought support. You can apply for this to help drought-proof your farm. Look out for one of the eight drought resilience hubs to be set up to help farmers, researchers and community groups to work on drought resilience. The budget also hands eligible farmers a rebate of up to $25,000 to help with new purchases and installation of on-farm water infrastructure. The government topped up this oversubscribed scheme with $50 million. You can find out more about the scheme here.

Farmers will have better access to agricultural and veterinary chemicals thanks to a $2.4 million allocation over four years. Meanwhile, there’s a new levy for dried vine fruits for biosecurity management. As well, those who are farming prawns will have a white spot disease repayment and a one-year holiday on the export charge.

The downsides

However, what’s not good for agribusiness is the lack of funding for new biosecurity, or the expansion of the regional connectivity program to boost Internet speeds beyond the cities. And, while there were a few financial sweeteners to lure more harvest workers to the regions, the uptake is slow with producers forecasting higher retail prices as a consequence. An estimated 30,000 workers are needed.

The bane of farmers – extreme weather and disasters – did get some attention, $13.8 million, however it may well stretch thin. Those funds will go towards implementing recommendations of a royal commission in natural disasters arrangements.

The December update to the budget didn’t offer any quick solution to the protracted trade stand-off with China, which The Australian has estimated costs farmers $500 million – and growing – every year.

Your next step

These budgetary moves can help transform the trajectory of your agribusiness in these uncertain times. As your finance broker, we can help you understand the changes and how you can best leverage the federal budget.

Useful links:

Mid-Year Economic and Fiscal Outlook (released 17/12/20)

https://budget.gov.au/2020-21/content/myefo/index.htm

Smart Budgeting Tips For Small Businesses to Start the New Year Right

January 19, 2021

New year, new beginning

Never has that maxim been more appropriate than right now, as we look forward to a better year on all fronts in 2021. So, it’s time to take care of your business and pave the way to a brighter future.

There’s no better way to take care of your business than by smart and accurate planning and budgeting. Here are a few practical strategies you can use to improve your financial security in 2021.

Define and understand your risks

Everyone is a little wiser now about the way in which a global event can impact even a small, local business. Prepare your business with a thorough risk analysis by assessing the likelihood, and the effect on your costs and revenue, of the following situations:

Pandemic. A second or third wave of coronavirus, or a new form of flu
Natural disasters. Storms, floods, drought, bushfires
Workplace accidents. Machinery mishaps, road accidents, chemical spills
Service interruptions. Power, water, telecommunications, transport
Technology failures. Outdated equipment, network failures, skill shortfall
Security. Theft, vandalism, fraud, cyberattack
New government regulations. Restrictions, taxes or levies around water usage, carbon emissions, quarantine
Legal liabilities. Disputes with customers or employees, problems with contracts, insurance or regulations
Financial developments. Interest rate increase, supplier price increases, slow-paying customers
Market changes. Increased competition, reduced demand
Ideally, set up a risk management plan, and insure against the most likely risks where possible.

Set your budget and regularly revisit it

Your business will benefit from a formal budget, rather than a vague list of likely sales and expenses. In its simplest form a budget includes projections of sales and other revenue, by year, quarter or month, as well as costs under the same detailed headings used in your profit and loss statement.

Having a budget will help you set goals and make better business decisions, and is a standard requirement when you apply for finance. There’s a useful government website offering guidance on budget preparation.

But budgets should never be set in concrete. Half-way through the financial year, your figures may already be out-of-date. You may need to revise your budget, or get a better idea of where your business is going via a flexible monthly forecasting system, including cash flow projections.

Overestimate your expenses

Now that you fully understand your risks, one of the worst things you can do is underestimate your business expenses (and its converse, overestimate your revenue). It’s much better to manage your expectations and avoid disappointment by being ruthlessly realistic about what your costs could be. Add some contingent wriggle room by adding 10-20% to your best estimates under each expense heading.

As long as your budget says you’re still breaking even, and you continue to rigorously monitor your actual expenses when they occur, you may be able to look forward to a pleasant surprise instead of a nasty shock.

Don’t underpay yourself

The fortunes of your business depend heavily on you. So, while paying yourself first, and paying yourself well, may sometimes seem like an unattainable goal, plan to put your own financial welfare at the top of the list.

Work out a reasonable salary, as paid by companies of similar size in your locality. Then, aim to pay yourself regularly and formally, preferably using accounting or payroll software. An owner who takes a reasonable salary can be another plus point when applying for business finance.

New year, new finance needs?

Contact one of our brokers to find out how we can help you with finance for your 2021 business goals.

Enhanced Asset Write-Offs Announced in the Federal Budget 2020

October 16, 2020

The expanded asset write-off scheme announced in the budget is set to be a game changer in driving value from investing in plant and equipment.

The Benefits

When investing in equipment after the 6th of October and before the 30th of June 2022, eligible businesses will be able to:

Write off the full cost of new eligible depreciating assets of any value.
Claim the full cost of improvements to existing assets.
Instantly deduct the full cost of second-hand assets (must be purchased before 31st December 2020).
Deduct the balance of the simplified depreciation pool at the end of the income year.

How Linx Can Help You

Despite the benefits of investing, many businesses will have difficulty securing funding due to highly disrupted lenders.
We are proud to have helped our customers overcome COVID-19 disruption. Since April 2020, we have helped to invest more than $165 million for additional plant and equipment, including:

Assets ranging from IT equipment through to prime movers.
Assets aged from new through to as old as 30 years.
Working with businesses ranging from new start-ups to large corporates, operating across all industries.

At Linx, we have kept our full staff roster on, enabling us to continue delivering quickly and efficiently. We will continue to be here for our customers and get the job done.
Always talk to your accountant/tax advisor about what the enhanced allowances mean for you.

Stay up to date with updates and developments on the ATO website.
Find out more at https://budget.gov.au/2020-21/content/covid-19.htm#eleven

Achieve Financial Sustainability During Ongoing Uncertainty

September 18, 2020

Recent developments in Australia – and even New Zealand – have demonstrated that COVID-19 is going to be with us for quite a while yet. The businesses who survive, and come out the other end ready to accelerate, will do so because they were financially sustainable. But just how do you achieve financial sustainability? Let’s […]

Understanding the Details of the Instant Asset Write-Off Scheme

May 26, 2020

In last month’s instant asset write-off article, we outlined the instant asset write-off tax concession for businesses, with particular reference to the new provisions introduced by the Government in March 2020 in response to the economic impact of COVID-19. In simple terms, it means that businesses with an annual turnover of less than $500 million are able […]

Join Our Team

May 19, 2020

At Linx Australia Group, we’re meeting the current economic challenges head on. As specialists in Asset Finance and Insurance for over 20 years, Linx has been here for our customers during the good times and the bad; and now is no different. We’re still fully operational and we’re here to help our customers secure the funding they need to make it through to the other side of the COVID-19 pandemic.

We are seeking like-minded, established brokers who share our passion and drive in helping our customers to succeed and grow. If you are looking to join a stable and long-standing organisation that is supported by a hardworking operations team, then we would like to hear from you.

To introduce yourself and start the conversation, send us an email with you background and the subject “Equipment Finance/Insurance Brokers EOI” to careers@linxaustraliagroup.com.au. In the first instance send us an email and we’ll be in touch.

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