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Tight Cashflow

How To Use Finance To Assist with Cashflow

An Article by John Stapleton – Finance & Leasing Solutions   

 

CASE STUDY – A business has $100,000 in their company bank account and plan to pay cash for an office fit out, new computer and telephone system.

An alternative would be to invest the $100,000 in a term deposit at 4.75%p.a. The initial $100,000 investment would have increased to $135,408.12 before tax in 5 years.

If that business were to finance their office fit out on a Commercial Hire Purchase facility, it will have only cost them $122,233.37 before depreciation and allowable tax deductions. Assuming the company chose to finance their office upgrade they would still have their $100,000 plus accrued interest, and they would also now own the financed asset. A potential saving of over $13,000.

John Stapleton is the Director of Finance & Leasing Solutions, and has been arranging finance and leasing packages for over 15 years.

 

SMSF Consultants – Self Managed Superfunds and Superannuation Experts