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Tradies – How Refinancing Your Loans Can Create More Cash for Christmas

As Christmas approaches the thought of paying for presents and entertaining can be daunting, but simply by refinancing your loans you could have more cash on hand rather than maxing out the credit card.

Tradies finance expert Shane Smith said by refinancing high rate loans into lower rate facilities trades-people could have more cash to pay for Christmas expenses.

“People often end up hammering their credit card at Christmas time,” Mr Smith said.

“High credit card interest rates means this can lead to a huge debt that continues to be paid long after Christmas has gone,” he said.

“Reviewing your finances before Christmas can make the holiday period much less stressful.”

“Christmas can be a time when work dries up for tradies and other workers.”

“By planning for the quieter period now, you could save some financial pain later.”

“If you review your finances when your credit is good and clear there will be more options available.”

“This can result in lower monthly repayments and less interest as lower rate facilities will be sought after.”

“Refinancing your loans could have the added benefit of consolidating your loans into one, making them easier to manage.”

Mr Smith said despite the benefits of refinancing, people should be aware of some potential pitfalls:

Exit fees and penalties: Look out for these fees, especially on loans for cars and equipment.

Weigh up the total cost of refinancing: Sometimes a cheaper rate does not necessarily mean you will save – speak to a licensed finance professional.

Don’t leave it too late: Review your finances when your credit rating is high giving you every chance to secure the best products on the market. Refinancing when you get in trouble may only leave you with high interest rate options.

Mr Smith said people could be paying too much for their loans and there was a way of freeing up some cash.

“There is help at hand,” he said.

“Make sure you do it before it’s too late and make it easier on yourself for a stress free holiday period.”

For more information about refinancing your loans visit: www.financefortradies.com.au

How Tradies Can Avoid Getting Caught Out By the $20K Small Business Benefit Scheme

Tradies are being warned against seeing the Federal Government’s Small Business Benefits Scheme as a spending free-for-all.

Perth tradies finance expert Shane Smith said the scheme provided incentive for tradesmen to purchase equipment and vehicles to help assist and grow their businesses.

“But tradies need to be careful that they don’t see the scheme as an opportunity to buy a whole lot of personal items that won’t be used for business,” said Mr Smith.

“For example, you can’t buy a set of power tools and think you can claim it for business if your core business is not in construction,” he said.

“I’ve seen a few tradies, and their wives, thinking they can buy up big on things like white goods and claim the tax benefit.”

“The scheme has certainly sparked a flurry of last minute buying in the trades industry and I’m sure there will be more in the next few days before the end of the financial year.”

“I’ve already witnessed this first hand at the Perth Tradie’s Expo last weekend.”

“I was amazed at how many tradies were pushing empty trolleys going into the expo and coming out with trolleys overflowing with new power tools and other work toys.”

“However, tradies do need to proceed with caution to stay within the rules of the new scheme.”

Mr Smith said tradies should consider the following before purchasing:

The cost of the item cannot exceed $20K: For example if you purchase a work ute for $30K, then the whole $30K reverts to the current tax incentive. Only goods acquired under $20K can be used as a deduction upfront.

Make sure you can afford the repayments: If financing the new vehicle or equipment, make sure your businesses cash flow can support the additional repayment.

Speak with an accountant or qualified tax agent: Find out if the goods you are purchasing or financing will qualify under the scheme. New and used goods are ok.

You have time: The scheme is running until the end of June 2017 so you have plenty of time to carefully consider your business purchases.

Only Small Businesses Qualify: All those so called experts advising that you just need an ABN to claim the tax break are wrong. At the very least the ATO will expect to see evidence of real business activity.

Mr Smith said that just because the government was providing an incentive scheme to business owners and contractors didn’t give the green light to make wild purchases without considering the consequences.

Westwide Building Maintenance Owner Michael Gardiner recently financed a work ute for his business through Mr Smith.

“The $20K Small Business Benefit accelerated my decision to purchase a ute sooner rather than later,” said Mr Gardiner.

“The Tradies I have spoken with since the scheme was announced are now more likely to invest in their businesses.”

“They’re looking at adding a new vehicle to their fleet or purchasing a new piece of equipment to gain a new contract,” he said.

Mr Smith runs Finance for Tradies in Perth, specialising in Vehicle and Equipment Finance.

More information about getting a better finance deal is available at www.financefortradies.com.au

How to Avoid Being Ripped Off by Dealer Finance Offers

Tradies or ‘cashed up bogans’ are a welcome sight at most car yards because they are targets of high interest loans and buyers of insurance that they don’t necessarily require.

Tradies finance expert Shane Smith said that over his 20 years in lending he often saw tradies pay too much for their finance and have loans that do not meet their overall needs.

“I constantly get calls from tradies who have been blatantly ripped off and want to refinance into a lower rate facility,” said Mr Smith.

“The tradies’ loans that we see can have interest on them as high as 20 per cent and insurance products on top of that they do not need, or didn’t know they had,” he said.

“Most tradies do not ask what they are signing up for and are often bullied into signing the documentation so they can have the vehicle that day.”

“Finance consultants at some dealerships are instructed to sell or force as much insurance as they can at a high rate to gain the maximum profits, regardless if the client needs it or not.”

“Finance and aftercare accessories income is the most profitable part of the dealership so the consultants are set targets which are unreasonable.”

Mr Smith said tradies should do their research or employ an independent finance broker before committing to any finance contract.

Some of the warning signs to look out for are:

Not all information disclosed: An example of this is on the day the vehicle is delivered the Finance Consultant then announces and produces the contracts with thousands of dollars worth of loan protection insurance that wasn’t previously discussed. They may then go on to say that you cannot have your vehicle today unless you sign.

Interest Rate not Disclosed: By law, the rate on business loans does not have to be disclosed, however if your Finance Consultant has not advised of the rate then ask before signing.

Quick Sign-up of Loan Documents: If your Finance Consultant is rushing you through the sign up of loan documents, slow him/her down and read the contracts carefully.

Low Interest Rate Offers: If it seems too good to be true then it probably is. Read the fine print before you sign as these loans are normally taken over a shorter term meaning the repayments will be high. You also lose the ability to negotiate a discounted price on the vehicle.

Low Doc Loans Attract a Higher Rate: This is not true as most of the Low Doc Business Loans are the same rates as if you were to provide income details.

Mr Smith said that most banks and lending institutions now implemented a points scoring and profiling system for each client and the interest rate was determined by how a client scored.

“Time in job, deposit amount and asset backing are the main determining factors of interest rate,” said Mr Smith.

“You can imagine the calls I get when the tradies finally realise they have paid too much.”

“In some cases we are unable to refinance as the exit and setup costs of the new loan outweigh the benefit of a lower rate loan.”

To discuss your finance needs and see how we can help, give Shane a call on: 1300 175 175