Australia is one of the world’s most attractive countries for businesses. With a stable political climate, strong economy, abundant natural resources and skilled workforce, Australia’s conditions are ripe for businesses. Establishing or expanding a business to include an Australian location is made simpler thanks to the strong financing options that are available. In this article, we are going to cover how to finance your business in Australia and some of the most common methods used by corporations Down Under.
Equity and Debt Financing
Just like the signature you sign with a pen and paper – also known as a “wet” signature – a digital signature is a personal mark that is designed to make a deed, trust, instrument or other document bindings. Because digital signatures are a relatively new development, not all types are considered binding in all cases, but the most common varieties are:
Similarly, businesses can take advantage of specific loan types such as asset finance. Asset finance is a great solution for businesses that need access to machinery and other equipment to establish their business. Using assets you own as collateral, your business can borrow the money it needs. This is especially useful for businesses with large assets but low or inconsistent cash on hand.
Outside Investors
Australia has several common types of business structures available. Larger businesses looking to come to the country can take advantage of two different company structures that allow for outside investment.
- Private Company. In Australia, a Private Company is a business where the owners are protected by limited liability. They may only raise investment privately, i.e. not on the stock market. Private companies with fewer than 50 shareholders can raise funds from their existing employees and shareholders, or from the general public if their offering does not require a Disclosure Document. If you are making private offers for investment, such as to venture capitalists, you will not need to provide a Disclosure Document.
- Public Company. Public Companies are Australia’s largest class of organisation and are free to trade securities (such as shares) to the public. This type of company structure makes it easy to raise investment from the general public via the Australian Stock Exchange (ASX).
Trade Finance
Common among manufacturers, wholesalers and export businesses, trade finance is a type of credit supplied for the trading of goods. Using trade finance, your business can secure credit with a trade contract that it holds with another company. Providing documents such as a Bill of Lading is often enough to obtain trade finance. Although trade finance has many uses, the main benefits it offers are:
- Reduces risk. There is an inherent risk in trading, especially internationally, and trade finance protects buyers and sellers from the difficulties this process can involve.
- Protects against international instability. As economic conditions change and the value of money fluctuates, trade finance protects buyers and sellers from losses due to natural instabilities.
- Increases buying power. Since trade finance is secured by the value of a contract, it can be used to expand your business’ buying power to do things like taking advantage of economies of scale or bulk discounts.
Government Grants
As a stable and business-friendly government, the Australian Federal Government provides a wide range of support to corporations, including grants. Depending on the industry in which you operate, your company could be eligible for grants such as start-up and research payments. These grants are usually paid as single lump sums and can take time to apply for and receive. Speaking to a financing expert is the best way to find out whether your business is eligible for government grants when coming to Australia.
Need Help Financing Your Australian Business? Contact Australian Corporate Governance Today!
As one of the world’s leading economies and a friendly home for businesses of all shapes and sizes, Australia provides an enticing opportunity. Starting a business in Australia or expanding your company to include an Australian arm is made simple with the wide range of financing options available. Not all finance solutions are suitable for your business, so it is important to seek professional advice before making any decisions. The experienced team at Australian Corporate Governance have the network and contacts to find the best financing deals for your business. Contact us today for more information or to make an appointment.
