Tag Archives: Murray Inquiry

funding4business – Employee share scheme changes 1st July 2015

Changes to Aussie employee share schemes for start-up companies came into effect from 1st July 2015

Employee share schemes (ESS) provide an opportunity for employees to receive shares (or options to buy shares) in the company they work for.

The Australian government has made changes to the tax rules for employee share schemes to make it more attractive to employers and employees to participate, including a new concession for start-up companies.

Changes to employee share schemes include:

when options are taxed

increasing the maximum ownership limit to 10% of the total shares (up from 5%)

increasing the deferral period to 15 years (up from seven years) for tax deferred schemes.

Additional concessions for start-up companies
Under the new rules if shares are acquired in a start-up at a discount of up to 15% (relative to market value), then the discount is exempt from income tax. The shares will only be subject to capital gains tax on disposal.

What is a start-up?
Start-up companies, from any industry, need to:
be incorporated for less than 10 years
be an Australian resident company
have no equity interests listed on an approved stock exchange
have an aggregated turnover less than $50 million.

What you need to know?
The Australian government have published a guide for employers and standard templates for start-up companies to help you develop and maintain an employee share scheme. We have also developed a guide for employees to help them in making decisions to participate.

Find out more at:- www.ato.gov.au
Employee share schemes
ESS: Guide for employers
ESS: Guide for employees

funding4business – technology shocks coming for Aussie banks

funding4business – technology shocks coming for Ausssie banking

The Murray Financial Inquiry of 2014 into Australia’s financial systems has predicted that technology changes and market disruptors using new technologies will have the largest influence on changing the banking system in Australia, as we know it.

At the forefront of this change is the emergence of peer-to-peer crowdfunding in Australia.

Charles Moldow, General Partner, Foundation Capital in the USA, in a recent report titled  “A Trillion Dollar Market by the People, for the People”, claims that “peer-to-peer marketplace lending will over the next few years, remake banking as we know it”.

Today technology and innovation are making possible a new generation of financial services that are more affordable and more available. That’s why Moldow, believes that “marketplace lending” will evolve to be a trillion dollar “market by the people, for the people”.

Foundation Capital predicts that by 2025 $1 trillion in loans will be originated in this manner globally.

The peer-to-peer crowdfunding industry rose to prominence in the USA & UK during the onset of the Global Financial Crisis in 2008, plugging a hole left by the reluctance of cash-strapped banks to lend to small businesses.

Consequently it has created an opportunity for non-traditional lenders through peer-to-peer platforms to cater to the growing demand for alternative business financing options and directly connecting borrowers and investors

For the first time in banking, the online marketplace makes it possible for a third party to match financial supply and demand. As a result, lenders and borrowers can now find one another and agree to loan terms, all without the involvement of retail banks or credit card companies.

The San Francisco based LendingClub Corp, one of the USA’s largest operators in the online peer-to-peer marketplace, has facilitated more than US$5 billion in loans since its launch during the GFC in 2007. This shift to a peer-to-peer crowdfunding is not unique to the USA.

The major UK networks providing these investment options include, Funding Circle, CrowdCube, Zopa and RebuildingSociety. Funding Circle alone has facilitated over GBP400 million in business loans in the UK over the four years since establishment.

See Charles Moldow’s complete Foundation Capital report here:- www.foundationcapital.com/downloads /foundationcap_marketplacelendingwhitepaper.pdf

funding4business – Release # 8 Business Health Check

NEW! Get your Business Health Check!

Complete our brief online questionnaire and get your Business Health Score.

Your business health score is based on an analysis of the standard business performance ratios that apply to your business such as;  Working Capital Ratio, Profitability Ratio, Inventory Turnover Ratio, Debt Ratio and other parameters.

Your Business Health Score will provide a guide for you and prospective lenders and/or investors as to the health and ongoing viability of your enterprise.

A per-requisite of your business health check, is to have your business loan requirements listed in the funding4business marketplace.

NEW! Get Business Mentoring and Advisory Services!

Need help with your business?    Need advice on cash-flow management?

Then you can hire one of our business advisers for an hour, for a day, or for a month.

They can help you in preparing business plans, cash flow analysis, sales and revenue forecasting, or negotiating a business loan on your behalf.

They can provide independent objective advice and provide an external view on your business and any issues you are facing.

 

funding4business – real estate crowdfunding

Real estate Crowdfunding set to top US$2.5 Billion this year

Entrepreneur Magazine
Catherine Clifford – 4th March, 2015

Real-estate crowdfunding was a $1 billion industry in the USA in 2014 and is expected to grow to more than $2.5 billion this year, according to a report released today from USA industry research firm Massolution.

Across the globe, investors and homebuyers are using crowdfunding as a way to own and profit off of commercial real estate or to finance the purchase of their own homes. In 2014, USA crowdfunding campaigns ranged in size from less than $100,000 to over $25 million.

When most people think about crowdfunding, they’re likely to think of a group of friends pulling their finances together to back the launch of a new indie film or a wallet made out of duct tape.

While still emerging, the real-estate crowdfunding industry is growing quickly. To date, there are 85 real-estate crowdfunding platforms currently in operation, according to Massolution.

“Residential crowdfunding has the breakout potential, as mortgage loan origination, a trillion dollar market, is opening up to distributed platform financing,” the report says. One example of residential real estate crowdfunding is LendInvest, a platform out of the U.K. that did $240 million worth of residential mortgage loan initiations last year.
Property investors are using real-estate crowdfunding as an alternative way to invest money they are looking to make money with. For example, on USA platforms such as Realty Mogul, many investors pool their money to buy a commercial real-estate investment with the expectation that the rate of return on their investment will be higher, with less risk, than other typical investment alternatives.

The benefit of real-estate equity crowdfunding over real estate investment trusts, or REITs, which have already been around for two decades now, is speed and diversity. “Technology allows this activity to be conducted more swiftly and more efficiently, availing the investment opportunity to more participants,” the report says.

Crowdfunding for commercial and industrial investments is growing faster than it is for residential or multi-family real estate investments, according to the report. Still, crowdfunding is being used as an alternative finance method to a mortgage from a bank for individuals looking to move into their first home. And there is significant potential in this sliver of the real-estate crowdfunding market.

funding4business recognised this emerging trend into on-line and Internet based financial services and was specifically established to facilitate peer-to-peer start-up funding and business loans to Aussie businesses.

funding4business enables crowdfunded property investments – today

We are an Aussie company, with an Aussie team, applying Aussie developed technology and know-how, to an emerging P2P alternative investment and financial marketplace for the benefit of Aussie business borrowers and Aussie investors.

We connect business borrowers with investors such as SMSFs, HNWIs, SIVs and PIVs holders for their mutual benefit.

Peer-to-peer (P2P) lending acts as a flexible investment alternative where established businesses can borrow funds and negotiate business loans directly with willing investors at mutually acceptable investment rates, terms and conditions.

The funding4business marketplace is open and transparent, offers a broad range of investment options, provides flexibility, offers potentially better investment returns, faster and simple settlement, online registration and algorithmic loan matching to your investment criteria.

funding4business was launched in Australia on 1st August 2014.

Release #5 is now live at funding4business.com.au

NEW! Start-ups seeking funding can now list in the marketplace

This method of peer-to-peer financing is for early stage equity investment in start-up enterprises seeking seed or establishment risk capital, especially in the technology sector.

NEW! Crowdfunders can now list in the marketplace

The CrowdFunding method of peer-to-peer financing is usually for established businesses seeking funding by pooling loan funds from a number of independent investors through peer-to-peer relationships.

As at today, we have 44 investors & businesses listed on our peer-to-peer marketplace with a total market value of $7,790,000

funding4business is an open and transparent peer-to-peer marketplace, where established Aussie businesses can source affordable business loans, crowdfunded loans or start-up funding from willing lenders and investors at mutually acceptable rates and loan terms.

Murray supports crowdfunding

Murray supports crowdfunding on Internet

The Murray financial system inquiry has rejected calls from some large banks that new digital and Internet based financial competitors should face the same regulations they do. The Murray inquiry said innovations that didn’t pose a risk to the financial system should have a lower regulatory burden, which “will allow innovation to come into the system.”

The Murray inquiry said technological change was transforming financial services quickly and could improve competition but also reduce it. Recent innovations include equity and debt crowdfunding and online business funding and lending.

funding4business recognised this emerging trend into on-line and Internet based financial services and was specifically established to facilitate peer-to-peer start-up funding and business loans to Aussie businesses.

We are an Aussie company, with an Aussie team, applying Aussie developed technology and know-how, to an emerging P2P alternative investment and financial marketplace for the benefit of Aussie business borrowers and Aussie investors.

We connect business borrowers with investors such as SMSFs, HNWIs, SIVs and PIVs holders for their mutual benefit.

Peer-to-peer (P2P) lending acts as a flexible investment alternative where established businesses can borrow funds and negotiate business loans directly with willing investors at mutually acceptable investment rates, terms and conditions.

The funding4business marketplace is open and transparent, offers a broad range of investment options, provides flexibility, offers potentially better investment returns, faster and simple settlement, online registration and algorithmic loan matching to your investment criteria.

funding4business was launched in Australia on 1st August 2014.

funding4business – biggest issue facing start-ups in 2015 is access to seed funding

The biggest issue facing start-ups in 2015 is access to seed funding

Convincing investors to back your idea is the key challenge for every start-up, and usually an idea is pretty much all you have. Even a start-up that has some runs on the board, with a MVP product, customers and maybe some revenue, faces the challenge of convincing investors and lenders to understand the potential of their start-up business.

A recent DFK survey of the start-up sector in Australia & New Zealand confirmed that the hardest challenges for Aussie & Kiwi start-ups is access to funding. Raising money for start-ups is tough especially if you are just starting out with an idea or concept, few assets and no useful network for raising independent finance.

Cheree Woolcock, partner of DFK Australia & New Zealand says,  “We see that some banks have been reluctant to lend to start-ups and online-only business, but I think banks also need to adjust to the cloud-business-world.”

Nick Reade, ANZ general manager of small business, was quoted in The Australian recently saying many banks don’t play in the start-up sector because: “there are a couple of hundred thousand new small businesses every year and we feel that ANZ need to be in that market.”

So what is Start-up funding?

Start-up or seed funding is a method of peer-to-peer financing for early stage equity investment in start-up enterprises seeking seed or establishment risk capital, especially in the rapidly expanding Internet based technology sector. Investors in effect are putting up funds and purchasing equity in or taking the option to convert loan funds to equity in the start-up business.

What is the purpose of Start-up funding?

The first stage and objective of any new start-up is conceptualising and developing a minimum viable product (MVP). For this they will need development capital or start-up seed funding of maybe $150,000-$500,000 to pay for systems development resources required to establish the new enterprise.

If the founders of the new enterprise do not have access to these funds themselves, they have to go beyond family and friends to external investors such as private retail investors, Angel investors, high-net-worth individuals and/or other successful entrepreneurs.

So where and how do you find start-up funding outside the banking system?

Since the GFC, the traditional banking system has been adversely impacted by the high underwriting and servicing costs associated with lending to small and medium sized businesses. Plus as we have seen from the comments of the ANZ and the DFK survey above, the banks are usually very reluctant when it comes to lending money to start-ups.

Consequently it has created an opportunity for non-traditional lenders through peer-to-peer lending and funding platforms to cater to the growing demand for alternative business financing options such as start-up funding by directly connecting start-ups and investors

Peer-to-peer funding lets investors lend to individuals or invest directly into start-ups or established businesses and uses low-cost online platforms to cut out the banks and other financial institutions.

funding4business has recognised this technological and cultural shift in investment lending and borrowing and is the first and only peer-to-peer marketplace in Australia and New Zealand, specifically established to facilitate start-up funding, crowdfunding, and business loans, by connecting Aussie& Kiwi business borrowers together with Aussie and Kiwi investors.

The funding4business marketplace is open and transparent peer-to-peer marketplace, where established Aussie businesses can source start-up funding affordable business loans, crowdfunded loans or start-up funding from willing lenders and investors at mutually acceptable rates and loan terms.

funding4business was launched in Australia on 1st August 2014 and in New Zealand on 26th January 2015.

funding4business – equity-based crowdfunding regulation

Labor MP Husic urges government to act on equity-based crowdfunding regulation

Federal Labor MP Ed Husic has called on the federal government to introduce equity-based crowdfunding regulation as quickly as possible. Mr Husic, expressed concern that businesses were leaving Australia for more favourable regulatory environments such as New Zealand, while the government considered reform.

“The government has failed to meaningfully respond to calls for reform of the regulatory environment around crowd-sourced equity funding – a platform that is providing access to valuable, much-needed capital for start-ups,” Husic told Parliament.

“For now, I’m very mindful that the sector is demanding of this government a formal statement on where it is at in developing this framework. They’re seeing colleagues leave Australia and head to New Zealand because there’s a more accommodating regulatory environment there.

The government indicated in its Industry Innovation and Competiveness Agenda that the assistant Treasurer will consult widely on a regulatory framework to facilitate crowd-sourced equity funding, to build on the Corporations and Markets Advisory Committee’s (CAMAC) report.

That report was released in June and recommended the government make it easier for Australian businesses to raise capital through online crowdfunding platforms. It said that the government should change the legislation to allow all Australian to invest in companies through equity-based crowdfunding, albeit with a limit on retail investors of $10,000 per year and $2500 per start-up.

“The concern that start-ups have expressed if those types of limits are imposed is that it wouldn’t really raise the type of money that, in some cases, start-ups need to access for the whole exercise to be viable,” he says.

“While numerous ministers have told us how they’re big fans of crowd-sourced equity funding, we haven’t seen a response to the Corporations and Markets Advisory Committee report proposing a way ahead for this funding platform,” Husic says.

Mr Husic’s concerns are the delay on legislation, plus the CAMAC report’s recommendations, including limits on retail investors, are too conservative.

By Kye White | Wednesday, 29 October 2014

funding4business – government supports CrowdFunding for Start-ups

Federal Government supports CrowdFunding for Start-ups

The Abbott government has recently approved the National Industry Investment & Competitiveness Agenda, which in part supports the use of CrowdFunding and CrowdSourcing to enable start-ups and small businesses to access alternative finance and funding methodologies to source equity funding for their enterprises.

This decision is a follow-on from the earlier recommendations of the now disbanded Corporations and Markets Advisory Committee that had previously recommended that the government should implement enabling legislation to facilitate the use of CrowdFunding, as it would enable start-ups to raise capital and access new forms of funding, which would in turn, boost job creation and the broader economy.

It would also bring Australian legislation in line with CrowdFunding and equity raising legislation that has been successfully introduced in the USA, New Zealand, Canada and the UK, to support start-up enterprises which are driving the economies in these countries.

So what is meant by the term CrowdFundng

CrowdFunding is a method of peer-to-peer financing which can help start-up enterprises and established smaller businesses access fast and simple finance for business loans or start-up equity, by raising funds from the online community and by connecting with a number of independent investors via the Internet in a peer-to-peer relationship.

Start-ups and small businesses are introduced to potential investors directly through an open marketplace based on certain investment matching criteria and algorithms and thereby bypass the complexity and costs of middlemen and the banking world.

How does CrowdFunding differ from Start-up Funding

Start-up funding uses the same method of CrowdFunding but is specifically focussed on the raising or sourcing of seed or establishment capital for early stage equity investment in innovative start-up enterprises, especially in the technology sector. The start-up funds are raised in a similar fashion from the online community of independent investors in a peer-to-peer relationship.

Investors are introduced to potential start-ups through a marketplace based on certain investment matching criteria and algorithms. This type of equity investment is called risk capital because both the risk of loss and the potential for profit may be considerable.

Some background on the emergence of CrowdFunding.

Since the Global Financial Crisis in 2008, the traditional banking system had been hurt by the high underwriting and servicing costs associated with lending to small businesses. Consequently it has created an opportunity for non-traditional lenders through a process called peer-to-peer marketplaces to cater to the growing demand for alternative business financing options by directly connecting borrowers and investors.

Peer-to-peer (P2P) lending lets investors lend directly to individuals or businesses and uses low-cost online platforms to cut out the banks and other financial institutions.

The San Francisco based LendingClub, is one of the USA’s largest players in the online peer-to-peer Crowd funding marketplace, has facilitated more than US$5 billion in loans since its launch in 2007.

This shift to peer-to-peer (P2P) lending is not unique to the USA. In Britain for example, some peer-to-peer (P2P) networks are offering “mini-bonds” by lumping together lots of small, unsecured loans from retail investors such as superannuation funds, and lending them to established businesses in the form of debt funding. The major UK P2P networks providing these investment options include, Funding Circle, Zopa and RebuildingSociety.

Peer-to-peer (P2P) lending acts as a flexible investment alternative where start-ups or established businesses can borrow funds and negotiate directly with willing investors such as self managed super funds, at mutually acceptable investment terms and conditions.

funding4business has recognised this technological and cultural shift and is the first and only peer-to-peer (P2P) marketplace in Australia, specifically established to facilitate Start-up funding and business loans, by connecting Aussie business borrowers together with Aussie investors such as SMSFs, and HNWIs for their mutual benefit.

The funding4business marketplace is open and transparent, offers a broad range of investment options, provides flexibility, offers potentially better investment returns, faster and simple settlement, online registration and algorithmic loan matching to your investment criteria.

funding4business is not a bank, finance company or lender, and we are not owned or backed by a bank or finance company.

We are an Aussie company, with an Aussie team, applying Aussie know-how, to an emerging P2P alternative investment marketplace for Aussie business borrowers and Aussie investors.

funding4business was launched in Australia on 1st August 2014.

 

 

funding4business – $15 million buys permanent residency

$15 million Premium Investor Visa buys permanent residency

The Abbott Government has announced the introduction of new Premium Investor Visa Program (PIV) as an adjunct to the existing Significant Investor Visa Program (SIV) in order to tap into the explosion of new wealth throughout Asia, and to boost economic growth, job creation and encourage more HNWIs to call Australia home.

Under the existing Significant Investor Visa Program:-

This visa can lead to permanent residency in Australia after four years.
The prospective applicant must invest at least A$5,000,000 in complying investments in Australia.

The Federal Government proposes to create a new Premium Investor Visa (PIV) which offers a faster 12 month pathway to permanent residency for those who invest at least $15 million, plus will make changes to the existing SIV program to encourage investment.

Under the proposed Premium Investor Visa Program:-

This visa leads to permanent residency in Australia after twelve months

The prospective applicant must invest at least A$15,000,000 in complying investments in Australia.
The program will be introduced from 1st July 2015, and investments must align with “the Government’s national investment priorities”.

The program and the investment criteria will be managed by Austrade.

This is great news for funding4business, as there will be a larger pool of investment capital available to Aussie businesses through the first and only peer-to-peer (P2P) marketplace in Australia.

funding4business was specifically established to facilitate business loans, by connecting Aussie business borrowers together with Aussie investors such as SMSFs, HNWIs, SIVs and now PIVs holders for their mutual benefit.

Peer-to-peer (P2P) lending acts as a flexible investment alternative where established businesses can borrow funds and negotiate business loans directly with willing investors such as super funds and HNWIs, at mutually acceptable investment rates, terms and conditions.

The funding4business marketplace is open and transparent, offers a broad range of investment options, provides flexibility, offers potentially better investment returns, faster and simple settlement, online registration and algorithmic loan matching to your investment criteria.

We are an Aussie company, with an Aussie team, applying Aussie know-how, to an emerging P2P alternative investment marketplace for Aussie business borrowers and Aussie investors.

funding4business was launched in Australia on 1st August 2014.