Using Crowd-sourced Funding to Start or Expand Companies

Public companies not listed on a stock exchange such as the Australian Stock Exchange (ASX) or Chi-X will soon be able to raise funds through crowd-sourced funding.  From 29 September 2017, companies will be able to use crowd-sourced funding to raise funds to assist with start-up or expansion.

The Australian Securities and Investment Commission (ASIC) advise that eligible companies can raise up to $5 million a year, as long as they have less than $25 million in assets and annual revenue.

Anyone providing crowd-sourced funding services must hold an Australian financial services licence.  Investors can invest up to $10,000 a year per company and, in exchange for the investment, the investor will receive shares in the company.

More information for intermediaries and companies seeking to raise funds is available at ASIC’s website.  Further information about investing in a company via crowd-sourced funding can be found via a link on ASIC’s website.

Before considering this type of funding, make sure you read the information provided by ASIC and seek professional advice from your Accountant, Solicitor and Financial Advisor.

Sally Balwin Balanix Solutions

What Your Credit File Means for You

There is a lot of talk about your credit file these days. Every time you apply for a loan or credit card you have the enquiry on your file. It tells the date, the finance company you applied with credit for and the amount.

The most common issues we see are either multiple enquiries or defaults. Multiple enquiries usually come from people who go and see their bank for a home loan or car loan. Let’s say for example “Andrew” banks with Commonwealth Bank of Australia (CBA). He goes to CBA for a home loan, it all looks promising and they say lets apply as we can help you. Then it gets declined because for example Andrew has had a late payment on a credit card 3 months ago. Andrew has an account with ANZ from a few years ago so he then walks into ANZ. ANZ say it looks good so they apply and then it gets declined due to him not having savings in his bank long enough. Andrew then goes to a barbecue and his cousin says mate call Brenton from Dream Financing on 0423030533 he helped us into our house. Andrew rings me and I meet up with him. I tell him I wish he saw me first as I would have been able to tell him it did not fit with the other banks early on and give him some options. I put it to another lender which have advised Andrew’s situation is ok with then after I have workshopped the deal with the lenders. I cover off in my notes with them the reason for the decline with the other lenders and it gets approved however they are hesitant as they think CBA and ANZ know something they don’t and question the credit enquiries on his file.

Any more enquiries and almost certainly this would have not been approved. When you apply for loans with banks they always check your credit file. Some banks score your file and basically it automatically gets declined or approved depending on the score you receive. Other banks do not decline on the score however they still check, so as long as I cover of in my notes the other enquiries it can still be approved. This is why it is so important to see a broker who knows what they are doing. More often then not we obtain a better rate then customers can get by going direct anyway so it is even more imperative. If you have a default on your file whether it is paid or unpaid it will be automatically declined with some lenders depending on the amount the default is for.  Everyone can check their credit file for free by going to  If you need it instantly there is a fee however if you are happy to wait up to 10 days it is free. I encourage everyone to check it if they are unsure.

Brenton Pavey Dream Financing



Mobile: 0423030533

What is Looked at in Determining an Appropriate Business Structure

Determining the right business structure is very important and can differ from business to business.  Here are some of the things an accountant will look at when determining an appropriate business structure for a client.

  • Is the business being run for the benefit of a single family or a number of unrelated parties;
  • Is it the intention that over time the business will have significant assets;
  • How is the business to be funded – eg, through a loan or equity;
  • Are the activities of the proposed business likely to expose the owners to high risks and therefore potential liability;
  • Will the business incur losses at any stage;
  • How much income is the business expected to generate;
  • Is the business likely to bring in other partners/owners at a later stage;
  • Does the owner/s understand the various types of structure;
  • Is there a business plan in place;
  • What role does superannuation play in wealth creation for the owners; and
  • What are the long- term goals of the business person.

This is not meant to be an exhaustive list but it gives you an idea of the type of information an accountant will want to know so as to be able to provide you with the most appropriate advice in setting up a business structure.

For example, if the business is being run by a family solely for the family, then a discretionary trust might be an option whereas if the business was to be run by a number of people unrelated then it is unlikely that a discretionary trust would be the best option.

Potential business owners also need to understand that the structure of the business is more to do with protecting the assets of the owner/s rather than the tax advantages.  That is to say, obtaining an tax break is less important than the risks associated with exposing the business owner/s to high liability claims and they have the potential to destroy the business and place the owner/s at risk of losing the assets that they have work hard to achieve.

If you are thinking of going into business, or you are not sure if you are operating under the right structure, call Balanix today on 3264 4783.

David Balwin Tax Accounting CFO Business Advice

Why Consider Cause Marketing For Your Business

For many businesses, the marketing budget is tight so we are looking for the biggest bang for the buck.  Cause marketing can be a low cost good return strategy to consider.

Cause marketing is a type of corporate social responsibility, in which a business’s promotional campaign has the dual purpose of increasing profitability while bettering a community, not for profit and/or society as a whole.  You may have also heard of cause-related marketing which is a type of cause marketing that involves the direct cooperative efforts of a business and a non-profit organisation for mutual benefit.

Cause marketing is not necessarily based on a donation.  As it is a marketing campaign, it could relate to volunteering or supplying goods/services at a discount or pro-bono rather than cash donations that carry a tax deduction.

Cause marketing can be more successful if there is a direct link or story between the business and the non-profit organisation.  For example (this example is fictitious), Fred is a partner of XYZ 2nd Tier Accounting Firm who’s 18 year old child became blind due to a car accident.  When his child is at Braille House learning braille, Fred does gardening and handyman fix ups around the facilities as a way of giving back.  Fred’s 14 year old is always taking pictures of Fred and posting on social media what a great Dad he is.  Fred also organises a fundraising event each year where he encourages staff and clients to wear some sort of dotty clothing and donate $10 to Braille House for going dotty.

Here Fred is really only investing his time, however, the awareness of who he is, his story and his giving generates publicity for him and his accounting firm.  Through this cause marketing, people are more likely to engage with him to then use him as their accountant.

Continuing the fictitious example, Fred has 30 staff through which he could expand cause marketing to engage his staff in volunteering or taking on a project at Braille House as a way of professional development.  The staff then promote what they are doing to others which, in turn, promotes XYZ 2nd Tier Accounting Firm, not to mention the promotion of Fred and his staff’s generous involvement by Braille House.

A genuine and well-executed cause marketing campaign is one of the most useful marketing campaigns for both corporations and non-profits. A non-profit organisation can gain increased funding, exposure and reliability by aligning themselves with a trusted brand, while businesses see increased brand loyalty, boost employee morale, and raise sales by ‘sponsoring’ a worthwhile cause.

So, when you are thinking about your marketing think about throwing cause marketing strategies into the mix.

Sally Balwin Balanix Solutions

Classifying Repairs and Renovation in Rental Properties

How do we determine whether the work done is a repair or an improvement?

If you own a rental property this is very important in terms of the tax consequences.  It is the difference between claiming the cost as a deduction or having to depreciate the cost.

So how do we identify a repair as opposed to an improvement?

Some guidelines are as follows:-

  • A repair would normally mean the replacement of a worn-out part of something and not the replacement in its entirety.
  • The repair must be to something that is physically in need of repair – prevention is not repair;
  • Repairs means restoring parts of an entire thing not replacing the thing in its entirety;
  • If your repair is done to restore the function even if different materials are used then that is OK but it cannot go past restoring it to its former level. Therefore, replacing with like materials is very different to replacing wood with concrete for example.

If you have any questions as to whether what you are proposing to do is either a repair or improvement give Balanix a call on 3264 4783 before undertaking the work.  Once the work is done it is too late and could mean the difference between claiming the work as a deduction against current years income and having to depreciate it over the life of the asset.

David Balwin Tax Accounting CFO Business Advice