Leasing and Finance Solutions
IBA offers leasing services to Indigenous individuals, partnerships or organisations to assist in the establishment, consolidation or expansion of commercially viable businesses. Leasing provides an attractive alternative to buying as it requires less capital outlay to commence achieving business objectives.
Operating leases (rental agreements) are available for property, vehicles, machinery, plant and equipment that are specifically for business use. Either new or used assets can be provided.
Benefits of an operating lease include:
- commercially competitive interest rates
- payments that are fixed for the term of the lease
- payments that may be fully tax deductible
- monthly direct debit facilities which allow easy payment processing
- no application fee.
Options at the end of a lease term include:
- returning the asset without obligation or further payment
- continuing to rent the asset for an extended term
- upgrading to a new asset
- making an offer to purchase the asset.
Check out our Asset Leasing Register for a list of pre-owned assets or property currently available.
IBA provides invoice finance to assist Indigenous-owned businesses to take advantage of new contract or sales opportunities that may otherwise be out of reach.
What is it?
Invoice finance provides businesses with revolving cash flow based on the value of credit sales or major contracts. Aligned to the business’s cash flow cycle, contract or sales activity, invoice finance provides the necessary working capital to enable the business to finance the usual costs of delivery, such as wages, inventory, raw materials and transport costs. This provides certainty to the buyer and strengthens the competitiveness of the business.
How does it work?
You receive an order or sign a contract with your buyer. Once you deliver your products or services, you invoice the buyer. On a regular basis, you send your updated aged debtors ledger to IBA and we purchase all eligible new invoices. Rather than wait 60 to 90 days for your buyer to pay, you are able to request up to 80 per cent of the value of the eligible invoices bought by IBA within 24 hours of IBA purchasing them. On the due date, your buyers make payment for the invoices to a bank account managed by IBA.
IBA then applies the funds to your account, reducing the amount that you have drawn and making the remaining 20 per cent (less any interest and charges) available to you. You can draw down that 20 per cent, or you can leave it there to reduce your interest costs on your overall funding.
Is it the right product for your business?
Invoice finance is best suited to established businesses:
- with at least 50 per cent Indigenous ownership
- with a track record of sound performance
- that experience seasonal sales
- that are growing rapidly
- that are smaller or undercapitalised
- that operate in markets where debtor terms exceed supplier terms
- whose owners lack the security to access bank finance.
What are the benefits and features?
- reliable cash flow—submit your ledger electronically to receive up to 80 per cent of the value of your invoices within 24 hours
- online access—manage the whole process online when you want, giving you full control
- cash injection—absorb cashflow pressure and accommodate fixed overheads such as rent, wages and tax
- financial confidence—make decisions about strategic development, such as business planning, securing competitive trade terms, fulfilling substantial orders and pitching for new business opportunities, and provide procurement officers with confidence in your financial capacity to fulfil the contract
- savings—pay your trade creditors quicker, to take advantage of early payment discounts
- access to cash—access cash without having to give away expensive early settlement discounts to your customers
- sales ledger control—manage the collection of payments from your customers when invoices are due
- privacy—subject to meeting credit criteria, choose not to disclose the facility to your customers
- flexibility—utilise funding that grows with your sales.
What are the rates and fees?
There is a small establishment fee to cover the cost of setting up the facility, and a management fee is charged as a small percentage of the value of the invoices that IBA buys from you.
The interest rate payable on funds drawn is equivalent to the Reserve Bank of Australia’s official cash rate plus a risk margin based on IBA’s credit assessment.
How can I learn more?
Contact us today to discuss the needs of your business and we can provide you with an indication of pricing and the facility structure. To apply you will need to complete an invoice finance application.