Financing your business

Calculate how much money you need

To work out how much money you’ll need to start your business, calculate your start-up costs (one-off expenses to get set up) and how much working capital you’ll need to pay for regular ongoing costs.

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Start-up costs

These are the funds required to buy equipment, the purchase price of the business/franchise, and all other set-up costs. Examples include:

  • Office equipment
  • New phones 
  • Deposits on leases
  • Legal fees
  • Signage
  • Vehicles
  • Initial stock.

Working capital (ongoing expenses)

Your ongoing expenses include: 

  • Regular monthly costs, e.g. rent, advertising, insurance, utilities such as electricity bills
  • Direct input costs, e.g. raw materials, stock, wages.

To calculate your total working capital requirement, estimate your monthly costs. Then multiply your estimated monthly costs by the number of months you’ll be in business before you start to get money from sales.

Using savings vs borrowing money

You don’t have to pay cash for everything. Borrowing money can cut down on the savings you need to fund the business until it’s profitable. 

You’ll likely spend more than you earn while starting up. So it’s worth thinking about ways to keep your costs down and get on good terms with your suppliers. They can be a useful source of credit when things are tight.

Loan types

You may need a mix of financing options to meet your needs and have a balanced lending portfolio. 

With a variety of repayment and interest rate options available, a business term loan can assist you with your medium to long term business finance needs.

Ask your accountant or an ANZ Business Specialist which financing options may suit your business and situation. 

For equipment and vehicles, look into leasing or hire purchase. This may make sense for technology equipment such as computers that can quickly become outdated.

Get paid promptly

The more business you can do for immediate cash payment the better. This improves your cash flow and reduces the need for working capital or going into overdraft.

If you decide to do business on credit, avoid the temptation to extend credit to every new customer. Check references, make sure they accept your payment terms, and set up systems to quickly follow up overdue debts.

Getting finance

If your available cash is less than the total funds required to start your business, then you may need to borrow the shortfall. If it’s a significant sum of money, you may be asked to include evidence of your personal finances.

Statement of personal financial position

A statement of personal financial position lists what you own (assets) and what you owe (liabilities). It also lists the present values of your assets and liabilities. 

Lenders use this information to assess what you could use as loan security or contribute to the business in the way of equity (also called capital).

Assets include:

  • Cash in bank accounts, finance companies, building societies or credit unions
  • Property, e.g. if you own your house
  • Motor vehicles
  • Bonds or shares
  • Major furniture and household effects
  • Life or superannuation policies – give the surrender value if you cancel or withdraw early

Liabilities include money you owe on:

  • Credit cards and bank accounts in overdraft
  • Other cards or accounts, e.g. store cards
  • Mortgages and personal loans
  • Money owing on hire purchase agreements
  • Loans on life insurance policies
  • Tax payments

Income/outgoings position

Your income/outgoings position is your monthly budget. It shows how much you earn each month and how much you spend each month. Lenders use this information to work out how much you can afford to borrow and a realistic repayment plan.

Expenses (outgoings) include:

  • Housing costs
  • Bills, e.g. electricity, internet, rates
  • Living expenses, e.g. food, school fees
  • Loan and hire purchase repayments
  • Insurance premiums
  • Tax payments
  • Transport costs, e.g. vehicle costs or bus fares

Income includes:

  • Salary or wages
  • Income from rental properties or boarders
  • Interest on savings or term deposits
  • Income from other investments
  • Government benefits, e.g. Jobseeker support

Starting a business

There is a lot to think about when starting a business, this video runs you through some of the things you can start checking off to get yourself open for business.

Contact an ANZ Business Specialist

Our specialists understand your kind of business and the challenges you face as a business owner. We can help you figure out how to make your business grow and succeed.

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Important information

We’ve provided this material as a complimentary service. It is prepared based on information and sources ANZ believes to be reliable. ANZ cannot warrant its accuracy, completeness or suitability for your intended use. The content is information only, is subject to change, and isn’t a substitute for commercial judgement or professional advice, which you should seek before relying on it. To the extent the law allows, ANZ doesn’t accept any responsibility or liability for any direct or indirect loss or damage arising from any act or omissions by any person relying on this material.

Lending criteria, terms, conditions and fees apply to all lending facilities.

Please talk to us if you need financial advice about a product or service. See our financial advice provider disclosure at 

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