Nine in 10 FHBs trust brokers to help them buy their first property

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Remember that classic TV ad: ‘nine out of 10 dentists recommend using [toothpaste brand]?’ Well, it turns out we’ve earned a similar level of trust when it comes to helping first home buyers sink their teeth into the property market. 

That’s because nine out of 10 first home buyers (FHBs) recently said they trust a mortgage broker to help them buy their first property.

And, unlike dentists, we’re actually allowed to show our faces!

So why do so many first home buyers trust mortgage brokers?

The Genworth First Home Buyer Report 2021 surveyed 2,077 prospective FHBs, and 1,008 recent FHBs – and we’re pretty chuffed with the results.

Here’s what one respondent said:

“Go and see a professional broker in-person early on in the process. That way they know your situation and are able to best guide you through and help you out,” the 32-year-old recent FHB from WA said.

And he wasn’t alone.

Almost nine in 10 FHBs believe mortgage brokers help cut through the complexity in the home buying process.

The report also found a similar proportion of FHBs believe mortgage brokers provide reliable, trusted advice and information.

And finally, close to 90% of respondents said mortgage brokers provide valuable support during the home buying process.

So in a nutshell:

Trusted = tick.
Jargon busters = tick.
Reliable advice and information = tick.
Valuable support = tick.

How we could help you buy your first home

You might have noticed the property market has picked-up over the past 12 months, to say the least.

It’s left a lot of prospective first home buyers frustrated that the suburbs they were once focusing on have moved out of their price range.

While this may be the case for a lot of people, it’s not always the case.

There are a number of federal government schemes available to FHBs, including the First Home Loan Deposit Scheme – which can allow you to buy your first home with a deposit of just 5% without paying for Lenders Mortgage Insurance.

There’s also a range of state and territory government schemes designed to give FHBs a leg up into the property market, including first home buyer grants and stamp duty concessions.

For more information, give us a call today – we’d love to discuss your situation and help you make the leap from renter to first home buyer, and get you smiling as proudly as your dentist does!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

SME Recovery Loan Scheme revamped to help more businesses

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More small and medium-sized businesses struggling to stay afloat due to the economic impacts of COVID will have access to cheaper funding after the federal government expanded the eligibility criteria for the SME Recovery Loan Scheme.

The government is removing requirements for SMEs to have received JobKeeper during the March quarter of 2021, or to have been a flood-affected business, in order to be eligible for the SME Recovery Loan Scheme.

What’s special about the SME Recovery Loan Scheme?

Ok, basically the federal government will guarantee 80% of each loan in the scheme, and because of this, lenders can offer the loans “more cheaply and more freely” compared to ordinary business loans.

The first iteration of the scheme kicked off back in March 2020 under a slightly different name – the SME Guarantee Scheme (and back then the government was only guaranteeing 50% of the loan).

Under today’s version of the scheme, SMEs dealing with the economic impacts of COVID with a turnover of less than $250 million will be able to access loans of up to $5 million over a term of up to 10 years.

Other key features of the SME Recovery Loan Scheme include:

– Lenders are allowed to offer borrowers a repayment holiday of up to 24 months.
– Loans can be used for a broad range of business purposes, including to support investment.
– Loans may be used to refinance the pre-existing debt of an eligible borrower, including debts from the SME Guarantee Scheme.
– Loans can be either unsecured or secured (excluding residential property).

Could this scheme help your business?

So far, 74,000 loans totalling around $6.2 billion have been written under the scheme – so it’s already helped a lot of other businesses around the country.

NAB and Westpac, both participating lenders in the scheme, immediately welcomed the changes, with NAB stating “SME Recovery Loans are a good option for businesses who need additional capital at this time”.

It’s important to note, however, that the loans will only be available through participating lenders until 31 December 2021.

So if you’re interested in finding out whether the SME Recovery Loan Scheme could help your business, get in touch today and we can help you apply through one of the participating lenders.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

COVID hardship and grant options that could help you

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With the pandemic once again tightening its grip around many parts of Australia, today we’ll run you through hardship and grant options that could be available to you or your business.

Setting all politics aside, it’s safe to say no one wants to be here. Yet here we are – this time with no JobKeeper or the original JobSeeker payment to help keep us afloat.

So what grants, schemes and hardship arrangements are available to small businesses and individuals this time around?

Let’s run through this year’s COVID support options below.

Loan deferrals on home and business loans

Impacted small businesses with loans in good standing are being supported by lenders with repayment deferrals of up to three months.

For home loan holders, lenders are also providing a range of support measures, including loan deferrals on a month-by-month basis.

Since July 8, more than 14,500 home loans have been deferred, while more than 600 business loans have been deferred.

“Support is available to all small businesses and home loan customers significantly impacted by current lockdowns or recovering from recent lockdowns, irrespective of geography or industry,” says Anna Bligh, CEO of the Australian Banking Association.

Business grants and payments

As you’ll see below, each state and territory has their own grants and schemes available for businesses and individuals.

As the situation is constantly evolving, it’s worth double-checking to see if your business is eligible for any other grants or payments not listed below.

NSW: If you’re a business, sole trader or not-for-profit organisation in NSW and you’ve been impacted by the recent COVID-19 restrictions, you may be eligible for a one-off grant of $7,500, $10,500 or $15,000. Apply here by September 13.

Victoria: There are several grants in Victoria for employing and non-employing businesses. The Small Business COVID Hardship Fund provides $10,000 grants for eligible SMEs that have experienced a reduction in turnover of at least 70%. Apply here by September 10. The Business Costs Assistance Program Round Two offers grants of $4800 to eligible businesses in specific industries. Apply here by August 20.

Queensland: Lockdown-impacted businesses in Queensland can apply to receive a grant ranging from $10,000 to $30,000, depending on the size of their annual payroll. Grants of $1,000 are also available for non-employing sole traders. Apply here by November 16.

Western Australia: The Small Business Lockdown Assistance Grant: Round Two provides $3000 cash flow support to small businesses in industry sectors most impacted by the recent circuit-breaker four-day lockdown and interim restrictions. Apply here by August 31.

South Australia: Small and medium-sized businesses forced to close as a result of the state’s lockdown (beginning 20 July 2021) may be eligible for a $3,000 emergency cash grant. Sole traders may be eligible for $1000. Apply here by October 17.

ACT: COVID-19 Business Support Grants will provide up to $10,000 for employing businesses and up to $4,000 for non-employing businesses that experienced a turnover decline of 30% or more as a result of the COVID-19 lockdown health restrictions. Find out more here.

For individuals

The federal government’s COVID-19 Disaster Payment is a lump sum payment to help workers unable to earn income due to a COVID-19 state public health order.

This may involve a lockdown, hotspot or movement restrictions. How much you can get depends on your location and circumstances. It’s available to eligible ACT, NSW, QLD, SA and Victoria residents.

Tenant and landlord support

NSW landlords who reduce rents for tenants hard-hit by the pandemic will be able to access up to $3,000 per tenancy agreement.

For landlords to be eligible, their tenant’s take-home weekly income must have fallen by 25% or more. The tenant also needs to continue to pay at least 25% of the rent payable.

Meanwhile, the Victorian Government has made it a requirement for commercial landlords to provide rent relief that matches their tenants’ fall in turnover in response to coronavirus, where the tenant is eligible for commercial tenancy relief support.

Get in touch today

Last but not least, it’s worth noting that there are refinance or restructure options you can explore in order to reduce your business or home loan repayments each month (without hitting the pause button). These include:

– asking for a better rate or moving to a lender that can provide one;
– extending the length of your loan;
– switching to interest-only payments for a period of time; and
– consolidating debt.

So if your business or household is one of the many doing it tough again, please get in touch today – we’re ready to assist you through 2021 and beyond, in any way we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

House price growth hits 17-year high, but is it slowing down?

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You’d have to go all the way back to the 2004 Athens Olympics to find a time when house price growth was faster than it has recently been. But latest data suggests the golden run has started to slow down.

It’s no secret that house prices have reached record-breaking highs this past year.

In fact, home values grew by 16.1% over the past 12 months – the fastest pace of growth since 2004, according to CoreLogic’s latest Hedonic Home Value Index.

To put that into a little context, the rate of growth over the past year has been so steep that houses in some cities are out-earning some of Australia’s top-paid professionals, including surgeons, anaesthetists and CEOs.

But there are signs that the growth rate is starting to taper.

Signs of a slow down

Australian housing values increased 1.6% in July, a result CoreLogic’s research director Tim Lawless describes as “strong, but losing steam”.

“The monthly growth rate has been trending lower since March this year when the national index rose 2.8%,” Mr Lawless explains.

And in a further sign of a property market slowdown, the value of new housing loan commitments fell 1.6% in June, the first fall in monthly lending figures this year, according to the latest Australian Bureau of Statistics data.

So what’s slowing things down?

With dwelling values rising more in a month than incomes are rising in a year, housing is simply moving out of reach for members of the community, Mr Lawless explains.

Additionally, much of the federal government’s earlier COVID-19 related fiscal support, including JobKeeper and HomeBuilder, have now expired.

“It is likely recent COVID outbreaks and associated lockdowns have contributed to some of the loss of momentum as well, particularly from a transactional perspective in Sydney which is enduring an extended period of restrictions,” CoreLogic’s latest Hedonic Home Value Index report adds.

That said, it should be noted that housing values are continuing to rise substantially faster than average.

Over the past 10 years, the average pace of monthly dwelling value appreciation has been just 0.4%, says CoreLogic.

So what’s ahead?

It’s likely the rate of growth will continue to taper through the second half of 2021 as affordability constraints become more pressing and housing supply gradually lifts, says CoreLogic.

“Other potential headwinds are apparent, including the possibility of tighter credit policies,” adds the CoreLogic report.

On the flip side, demand remains strong and is being aided by record-low mortgage rates and the prospect that interest rates will remain low for an extended period of time.

“A lift in the cash rate is likely to be at least 18 months away,” CoreLogic adds.

“The recent spate of lockdowns is likely to see Australia’s economy once again contract through the September quarter, a factor that is likely to keep rates on hold for a while longer.”

Get in touch

With house prices having just experienced their fastest pace of growth since 2004, it’s as important as ever to purchase your new home with a finance option that’s right for you.

So if you’re a keen homebuyer who wants to explore what options are available to you – including your borrowing capacity – get in touch today. We’d love to run through it with you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Cash flow tips for businesses thriving and surviving the pandemic

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Australia is a tale of two economies right now, depending on the state or sector your business is based in. Today we’ll run you through three cash flow tips for your business, whether it’s growing or struggling.

Covid-19 has really brought a two-speed economy to the fore in Australia.

For some businesses, the stop-start-stop nature of the pandemic has crippled cash flow and made planning ahead all but impossible.

Meanwhile other businesses, such as those in the digital space, are experiencing fast growth.

Your cash flow strategy this financial year will likely depend on how the pandemic is impacting it.

So below SME lender ScotPac has identified three cash flow management strategies for businesses that are growing, and for those that are struggling.

Three tips for managing growth

1. Find a flexible source of funding: strong cash flow is important for fast-growth businesses, which often have lots of cash tied up with debtors, ScotPac senior executive Craig Michie says.

“It’s important to find a source of funding that grows as your business grows. With invoice finance, as your debtors grow, so does the line of credit you can access,” he says.

“Another consequence of fast growth can be a demand on the business to put in place more capital assets, such as vehicles and equipment. In these situations, asset finance can help a business get the assets they need to support their rapid growth.”

2. Negotiate with suppliers: sometimes businesses can grow too fast for their suppliers to keep up with their demand for product.

If you don’t have the cash flow to pay your supplier for more product up front, you can attempt to renegotiate terms with them, or seek alternative finance options.

“One option for fast-growth businesses to have up their sleeves is to use trade finance. This ensures they can pay suppliers upfront so they can meet their increased demand for product,” Mr Michie says.

3. Cashflow forecasting is vital: cash flow is often described as the “lifeblood” of businesses.

Knowing what cash is likely to be coming in, and what’s likely to be going out, is therefore vital for not only keeping your businesses alive, but ensuring it will thrive.

“It’s not unusual for a small business to spend months winning big new clients, then realise they had not accounted for the cashflow implications of winning new business,” Mr Michie says.

“Putting in place a 13-week rolling cash flow forecast – which really would only take an hour with your accountant to set up, helps fast-growth businesses avoid cash flow issues.”

Three tips for getting through tough conditions

1. Get in touch with funders and the tax office: with a number of recent state lockdowns, and ongoing uncertainty in NSW, many businesses are doing it tough.

Mr Michie says it’s crucial for businesses struggling through adverse trading conditions to talk to their financiers asap.

“Do this early in the piece to get the best outcome. Talk to your funder about whether it’s possible to restructure or to put in place moratoriums,” he says.

He adds that SMEs shouldn’t put off talking to the Australian Tax Office either.

“Too many businesses make the mistake of thinking a problem ignored is a problem solved – getting on the front foot with tax obligations is vital.”

2. Look at your balance sheet: to help secure working capital for your business, Mr Michie suggests looking to the assets on your balance sheet.

“Balance sheet assets can be a hidden resource for many SMEs – your debtor’s ledger, unencumbered plant and equipment and even inventory can be used to bring working capital back into the business.”

3. Again, cash flow forecasting is vital: Mr Michie says that having a running 13-week cashflow forecast lets business owners spot any cashflow gaps on the horizon, with enough time to do something about it.

He suggests that this could include reassessing your cost base, negotiating with creditors to change terms or defer payments, or chasing up aged receivables.

Last but not least, get in touch

If you’d like to discuss how any of the above cash flow tips or finance options could help your business, get in touch today.

The sooner we can run through your options with you, the better placed your business can be in the 2021 financial year and beyond.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.