Zippy Financial Zippy Financial

COVID-19 has impacted us all in one way or another and for many businesses, the stop-start-stop nature of the pandemic has crippled cash flow and made planning ahead more difficult to manage. Managing cash flow is one of the biggest issues business owners face and in the current economic climate, cash flow management is more critical than ever.

Your business’s cash flow strategy this financial year is likely to depend on how the pandemic is impacting it. 

Here are our six cash flow management strategies for businesses that are growing and for businesses that are struggling during COVID-19. 

1 – Find a flexible source of funding

Strong cash flow is important for fast-growth businesses, which often have lots of cash tied up with debtors. 

It is important to find a source of funding that grows as your business grows. With invoice finance, as your debtors grow, so does the line of credit you can access. Another consequence of fast growth can be a demand on the business to put in place more capital assets, such as vehicles and equipment. In these situations, asset finance can help a business get the assets they need to support their rapid growth.

2 – Understand your business costs

Understanding your business costs is vital for informed business decisions. It helps you determine the profitability of your operations and how to set prices. This includes both fixed and variable costs – the former generally stays the same (e.g. rent, utilities) while the latter changes depending on how well the business is doing (e.g. staff wages, stock). 

When looking at fixed expenses, it’s a matter of deciding which ones you can stop, delay or negotiate down for the time being, as some of those costs may no longer be applicable. For example, if you’re a physical business that has had to temporarily shut its doors, could you put things like cleaning or photocopier support on hold or reduce the frequency? 

3 – Negotiate with suppliers

Sometimes businesses can grow too fast for their suppliers to keep up with their demand for products. If you don’t have the cash flow to pay your supplier for more products upfront, you can attempt to renegotiate terms with them or seek alternative finance options. 

One option for any fast-growth business is trade finance, which ensures that the payment of suppliers is upfront so that they can meet their increased demand for products.

4 – Cash flow forecast is vital

Cash flow is often described as the “lifeblood” of businesses. Knowing what cash is likely to be coming in and what is likely to be going out, is vital for not only keeping the business alive, but to ensure it will thrive. Preparing a cash flow forecast will help you get a sense of your cash movements – you can then adjust where needed to meet your financial objectives.

It is not unusual for a small business to spend months winning big clients and then realise that they had not accounted for the cash flow implications of winning this new business. Putting a 13-week rolling cash flow forecast can help fast-growth businesses avoid cash flow issues.

5 – Get in touch with funders and the tax office

With several recent state lockdowns and ongoing uncertainty in NSW, many businesses are doing it tough. It is crucial for businesses that are struggling through adverse conditions to talk to their financiers as soon as possible.

Talk to your funder about whether it is possible to restructure or to put in place moratoriums. Small and medium businesses should not put off talking to the ATO either – getting on the front foot with tax obligations is vital.

Additionally, contact your accountant or bookkeeper and check out the Australian Government website to see if your business is eligible for any federal or state COVID-19 support.

6 – Look at your balance sheet

To help secure working capital for your business, look to the assets on your balance sheet. Balance sheet assets can be a hidden resource for many businesses, your debtor’s ledger, unencumbered plant and equipment and even inventory can be used to bring working capital back into the business.

If you’d like to find out more about any of these cash flow strategies or explore finance options that could help your business, get in touch with Zippy Financial today. The sooner we can run through your options with you, the better placed your business can be for the remainder of 2021 and beyond. 

Phone: 1300 855 022              Email:

Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.

About the Author:

Louisa Sanghera is an Award-Winning mortgage broker and Director at Zippy Financial. With over 30 years of experience in banking, mortgage broking and property. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals.

Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate. Connect with Louisa on LinkedIn.

Louisa Sanghera – credit representative (437236) of BLSSA Pty Ltd ACN 117651760 (Australian Credit Licence No. Louisa J Sanghera is a credit representative (437236) of BLSSA Pty Ltd AC 117651760 (Australian Credit Licence No. 391237).

Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.

What is the Family Home Guarantee?

The Family Home Guarantee is an Australian Government initiative that aims to support eligible single parents with dependants in purchasing a family home.

From 1 July 2021, 10,000 Family Home Guarantees will be made available over four financial years to eligible single parents with dependants, subject to their ability to service a loan.

The Family Home Guarantee can be used to build a new home or purchase an existing home with a deposit of as little as 2 per cent, regardless of whether that single parent is a first home buyer or a previous owner-occupier. Investment properties are not supported by the Family Home Guarantee.

How does the Family Home Guarantee work?

Eligible single parents with dependants looking to build a new home or purchase an existing home are able to apply for a loan to purchase an eligible property through a participating lender.

The Family Home Guarantee program is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government.

NHFIC guarantees to a participating lender up to 18 per cent of the value of the property, provided the borrower has a minimum 2 per cent deposit, and is eligible for the program.

This will enable single parents with dependants to enter, or re-enter, the housing market sooner.

What types of properties are eligible?

For a property to be eligible under the Family Home Guarantee, it must be a residential property – this term has a particular meaning under the program and is consistent with the First Home Loan Deposit Scheme.

Eligible residential properties generally include:

Who is eligible for the Family Home Guarantee?

The eligibility criteria must be satisfied at the time the loan agreement is entered into. More information on eligibility criteria for the Family Home Guarantee will be outlined in forthcoming amendments to the National Housing Finance and Investment Corporation Investment Mandate Direction 2018.

What property price thresholds apply for the Family Home Guarantee?

The property price thresholds for the Family Home Guarantee will be the same as those applying to the First Home Loan Deposit Scheme.

The capital city price thresholds apply to regional centres with a population over 250,000 (Newcastle & Lake Macquarie, Illawarra (Wollongong), Geelong, Gold Coast and Sunshine Coast), recognising that dwellings in regional centres can be more expensive than other regional areas.

For the territories of Jervis Bay Territory, Norfolk Island, Christmas Island and the Cocos (Keeling) Islands, the relevant price cap is the same as the rest of state cap that applies in the closest State – New South Wales (for Jervis Bay Territory and Norfolk Island) and Western Australia (for Christmas Island and the Cocos (Keeling) Islands).

How to apply

Eligible single parents will be able to apply for the Family Home Guarantee through a FHLDS participating lender.

There are no costs or repayments associated with the guarantee. However, eligible single parents are responsible for meeting all costs and repayments for the home loan associated with the guarantee.

NHFIC will not accept applications directly and does not maintain a waiting list for places, including for the additional guarantees to be made available.

Date of issue: May 2021

Source: Australian Government

Most people have heard of rentvesting: it’s where you rent where you want to live, but buy a property where you can afford.

It means you can keep renting in the area where you have built your life, but to get your foot on the property ladder, you buy a property in a different suburb, city or even state.

You might be renting in an area where the rent is manageable, but the cost of buying is well out of your reach. This is the kind of scenario that rentvesting is perfect for.

Is rentvesting really the answer to affordability issues?

Here’s the reality: as property prices continue to climb upwards, many potential homebuyers have found themselves priced out of parts of major cities such as Sydney and Melbourne.

Property prices across the country are booming right now, so if you can’t afford to buy now in the area you’d prefer, it’s likely to be even less affordable a year or two from now.

That’s why many people are now exploring alternatives, to be able to get a foot in the door of the property market!

Is reinvesting a perfect solution? Not always. There are some downsides, which I’ll get to in a moment. But first, let’s discuss some of the benefits of rentvesting.

How does rentvesting actually work?

The best way to explain it is through a hypothetical example.

A young couple in their early 30s began rentvesting. They want to keep living in a capital city for their careers, but buying a home in their local area was well out of their price range – and they couldn’t see a time when it would become possible.

Instead of buying in Sydney, they chose to rent a place in their ideal suburb, while saving up for a property located in the Gold Coast – an area they chose for its relative affordability, rental demand and growth potential.

They bought an investment property for $400,000. A few years later, they used the growth in that investment to purchase a second investment property for $500,000. Five years later, they refinanced both investment property loans, and withdrew enough money to use as a deposit on a small home in Sydney.

Thanks to rentvesting, they were able to eventually buy their own home in Sydney, and they also now own three property assets. Now 40, they have plenty of options ahead of them:

This is a far better outcome than simply continuing to rent and saving for a property deposit for years and years…

That said, rentvesting does come with a few risks and downsides you need to be aware of:

There’s pros and cons to weigh up on both decisions, but the bottom line is: if you dream of owning a property, now is the time to look at all the options and make a plan to move you forward. If you’d like to find out your borrowing power and chat about your options, contact us today for an obligation-free chat on 1300 855 022.

Mortgage rates are now the lowest they have been in decades – most people are aware of this! We have never seen them this low in my 30+ year career in the finance industry.

With the interest rates this cheap, it is possible to borrow more than you have been eligible for in the past. But why does this matter? Well… it means that you may be able to afford a bigger home or you may be able to leverage your money further for an investment property to grow wealth for your future.

This is how it works…

Borrow to maximise your financial position

When applying for a mortgage or looking to refinance your existing mortgage, most borrowers look for the cheapest interest rate, but this should not be the only factor to consider.

The other thing to consider is the loan amount. It is important to consider the total balance of borrowing they can achieve and this could help them reach their goals. I always suggest that my clients do not just focus on the interest rate when comparing various loans.

So, the question that borrowers should ask is – should we seek to apply for the maximum amount that we can borrow in the current property market so to take advantage of the low interest rates? And the answer to this question depends on the personal situation.

Here are some risks and rewards of this strategy…

The reward – if you leverage your money well to get into the market, then over time, you are likely to enjoy property price growth. If you own your home and have one or two investment properties, this could put you in a great position to create wealth for the future. The way house prices have increase, you SHOULD make money, but there are no guarantees.

The risk – is evident if you don’t have a lot of money to play with as a deposit. If you borrow 90-95% in the current market and the market cools down, you could end up with negative equity (where the house is worth less than your mortgage). Therefore, it is generally advised to buy property as a longer-term strategy to give you “time in the market”.

What is your end goal?

When working out how much to borrow and setting up the right loan structure, the most important thing to remember is your end goal. Is it getting the cheapest possible interest rate or accessing equity to renovate or investing in property to work towards future wealth?

Everyone has different needs, and there are risks and rewards of each strategy, and by working with a mortgage broker, you can talk through the benefits and drawbacks of different scenarios, to ensure you make the best decision to suit you.

The number of borrowers has increased immensely as they take advantage of the current lending conditions, and in turn are shopping around more and reviewing their mortgages more often. It is also a lot easier to switch lenders than before, which is boosting activity and we are finding that cash back offers are very appealing too. We have had clients use the cash back to pay off their credit card debt or use it to offset their mortgage from day one. Cash back offers up to $4,000 are available, so get in touch if you are interested and we can look into your eligibility.

If you are thinking of refinancing, are looking for a new loan or just want to see what the current market has on offer, contact us for an obligation-free chat, so we can see if we can save you money with a better deal on your mortgage.

One of the biggest mortgage challenges that bubbled up during COVID-19 was the blowout in banks’ turn-around times. While most lenders were previously able to process and approve loans in several days to a couple of weeks, many of their processing times blew out to weeks and weeks – and for some banks, the turnaround time stretched on for months.

That bad news? These challenges are set to continue. With so many banks’ putting an end to pre-approvals, it’s putting extra pressure on other lenders, who can’t keep up with the demand. 

Add to this the fact that many banks have support staff based in India, in the grips of a harrowing COVID-19 outbreak, and it’s causing extra delays and dramas across the industry. 

As mortgage brokers, we do our best to help our clients navigate these choppy times, but it can be really volatile. We put a home loan deal forward to a bank recently and after submitting, this particular bank stopped taking applications, because they are at capacity in terms of being able to process loans.

Even though we submitted the deal before they announced this temporary cut off, they have refused to assess the deal. This is obviously really frustrating for the borrower, but it also makes us look really unprofessional in front of our client.

We are dealing with an environment that is constantly changing, and if we, who are in the industry are finding it confusing and challenging, I can only imagine how borrowers feel! If you are concerned about your home loan, need advice or you are having trouble working out your next steps, we are on hand to help as much as possible. Contact our team of experienced brokers today on 1300 855 022 for a chat about how we can help you move forward.

When you’re applying for a new home loan or refinancing your existing mortgage, it makes sense to look for the cheapest possible interest rate.

But looking for the cheapest loan is not always the best strategy.

You must be thinking I’m crazy for suggesting that sometimes, you should pay a higher interest rate – but hear me out!

In my experience as a mortgage broker, I’ve learnt that far too many borrowers focus purely on the interest rate when comparing loans. They do this, rather than focusing on the total balance of borrowing they can achieve.

When does it pay to pay more?

There are some situations when it makes more sense for homebuyers and property investors to opt for the loan that suits them best, rather than the loan that costs the least.

For instance, let’s say you’re refinancing. You’ve had your home loan for five years, and the value has grown from $700,000 when you bought it to $800,000 now. Your loan balance is around $560,000.

You could go with Lender A – their 2-year fixed home loan rate is very low at 2.09%. But they’re only prepared to lender to 75% of the property’s current value, which is $600,000. You can refinance and access $40,000 equity.

The problem? The purpose of refinancing is so you can renovate the kitchen and add a pool. That’s going to cost way more than $40,000.

Fortunately, you have the option of going with Lender B. Their interest rate is higher at 2.35%, but they’re willing to lender you 80% of the property’s value, which is $640,000.

This gives you access to the full $80,000 you need to renovate the kitchen and install a pool, with some money left over to recarpet the bedrooms.

Yes, you are paying a slightly higher interest rate, but in return you’re able to achieve your goals. In this instance, the renovation could potentially add far more value to the home than it cost, which will far outweigh the small amount of extra money spent on interest anyway.

Keep you eye on the end goal

When working out how much to borrow and setting up the right loan structure, the most important thing to consider is your end goal.

That might be getting the cheapest possible interest rate.

Or, it could be refinancing to get the most equity out, so you can use those funds on a renovation or to purchase an investment property.

Or, it might be borrowing the absolute maximum amount you can borrow, so you can leverage that money further as an investor.

Or, it could even be locking in a super-low fixed interest rate, so you have peace of mind that your repayments will be low for the next few years?

Everyone’s needs are different, which is why the right lending solution for you is so personal. There are risks and rewards of each strategy, and by working with a mortgage broker, you can talk through the benefits and drawbacks of each different scenario, so you can make the best decision to suit you.

We’re seeing many borrowers take advantage of current lending conditions; with interest rates this low, there’s never been a better time to compare your loan and make sure you’re getting the best possible deal.

In recent weeks we’ve started to see some lenders increase their fixed rate loans, which indicates they might have reached their floor. If you’re considering refinancing to a fixed-rate home loan, give us a ring for a chat, so you can see if you can save yourself some money with a better deal on your mortgage.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

Over the past 12 months there has been a deterioration of rents in the inner city unit markets across both Sydney and Melbourne. Rent values have fallen -4.9% in Sydney and -8.2% in Melbourne since March 2020. This has mainly come from the inner city regions. CoreLogic estimates that the City and Inner South market of Sydney accounts for 18.6% of investment units across the Greater Sydney region. The Melbourne inner region makes up an estimated 45.9% of investment units in the greater capital city.

Over the 12 months to March 2021, which captures 12 months since Covid restrictions were implemented, the City and inner south of Sydney has seen a -14.5% decline in the median asking rents from $620 per week to $530 per week. The median asking rents in Melbourne’s inner region sank by -18.9% from $475 per week to $385 per week.

These markets are disproportionately impacted by the closure of international borders where most overseas arrivals to Australia start out as renters. The halting of overseas migration has had a disproportionate impact on rental markets in these regions.

Whilst these markets are far from recovery there are signs that conditions may be stabilising. Median rents across units in the city and inner south of Sydney were lower over the year but have since risen 6.0% from a recent low of $500 per week in December.

Total unit rental stock on the market across Sydney and Melbourne is falling. In the month ending 11th April, the number of listed rentals did decline.

The elevated rent listings volume through the second half of 2020 across inner Melbourne shows how an extended lockdown and social distancing restrictions across the city had contributed to a deterioration in rents.

There are a number of reasons which may explain the curious stabilisation of inner city unit markets:

Conditions across inner city units seem to be stabilising, it is clear that the unit markets do have a long way to go before rents see a more consistent recovery trend. The return of international visitation to Australia has previously kept the rental markets buoyant amid high levels of new supply. A full recovery of rental incomes is unlikely until international arrivals are closer to pre covid levels.

Source: CoreLogic, April 2020

Everyone has been talking about mortgages for the last 12 months – ever since COVID-19 arrived, the topic of home loans has been constantly in the air.

From mortgage holidays to interest rates falling to record lows, it’s been a huge year for the finance industry.

It’s also been a huge year for you as a borrower, which is why my question for you is: when was the last time you checked your home loan interest rate?

If you haven’t taken a look at your home loan since 2019, then there’s a really good chance you’re paying too much for your mortgage.

This is because rates have fallen and banks and lenders are being more competitive than ever to try and get your business.

There are some big differences between packaged variable versus basic variable interest rates at the moment – and if you make the switch, you stand to save a lot of money.

What are the best home loan deals on the market today?

The answer to this question quite literally changes daily, but at the time of writing we are able to secure fixed home loans for our clients with an interest rate as low as 1.99%, and variable rates are also very low.

When I talk about packaged variable loans versus basic variable interest rate loans, you might not think there’s much of a difference.

The two loan products do sound very similar, but they’re actually really different.

A basic loan is just that – it’s a loan with no bells and whistles. You can’t save money in an offset account to reduce the amount of interest you pay. You can’t redraw money from your loan, if you make extra payments.

It’s a simple, no frills home loan and it’s quite popular with first home buyers or those borrowers who doesn’t want to pay extra features – they just want to pay their home loan off as quickly as possible.

A packaged variable loan comes at a cost, usually around $400. But for that fee, you get:

Banks are very competitive right now, with many of them even offering big cashback incentives to get your business.

We have lenders on our books who are offering between $2,000 and $4,000 as a bonus for you, if you refinance your loan with them.

Every bank has a different policy and loan criteria, which is where we can help. If you are thinking of refinancing and want to take advantage of lower interest rates or a great cash back offer, contact us today and we’ll see how we can help you get into a new loan that saves you money.

I want to share a recent scenario with you. This home loan deal should have been a shoe-in.

The clients, a professional couple, earned really good money – between them, they cleared a healthy six-figure sum each year – so they could more than afford the home loan repayments on the loan we were applying for.

So we ran the numbers, collected all of their paperwork, checked their payslips and did all the groundwork to submit their loan to a suitable lender.

Everything looked good from our end, so our team was shocked when the note came back from the bank: “declined” due to missed/late payments on an old credit card.

The following week, it happened again. The borrowers’ record looked squeaky clean to us, and when we asked if they had any repayment issues or red flags, they said no.

Turns out they’d had a credit card two years ago, which had been closed for well over a year, and they’d fallen behind on their repayments. Again, we were told the loan was declined due to missed/late repayments.

Here’s the thing about applying for a home loan: there can be no secrets any more. Not since Open Banking was introduced.

What is Open Banking and how does it impact you?

I think there’s still a lot of confusion around Open Banking, which came into effect around the start of this financial year (July 2020).

In a nutshell, Open Banking gives you the ability to share your banking data (like your transaction history and account balances) with third parties that have been accredited by the Australian Competition and Consumer Commission (ACCC). These third parties may be other banks, financial institutions or fintech businesses.

It was introduced to give you, the consumer, better and clearer access to your data. You control which third party can access your data, and how they can use that data under the open banking framework.

But here’s the thing: when you apply for a home loan, under Open Banking, lenders are sharing more information about you and your credit history than they ever have before.

This means that if you apply for any sort of credit, you need to be upfront and honest about any potential blemishes in your past.

Should you tell your broker or bank about previous defaults or missed payments?

Absolutely! There is nothing to gain by hiding any information, no matter how big or small it seems to you.

As your broker, we operate under something known as Best Interest Duty (BID), which means we have a legal obligation to place the client with the right bank for you. If you tell us about a previous default, it might be the case that Bank A is likely to decline your loan – so we’ll place your application with Bank B instead, because their policy is a little more forgiving.

We always ask the question: have you had any issues in the last two years when paying any of your bills or debts?

Your answer to this is crucial. You have to be as honest as possible, otherwise we risk applying for a home loan with a bank or lender who, if we’d known the whole story upfront, we never would have applied with.

Moral of the story?

Don’t cover it up – it most cases we can work around the problem and find a finance solution for you. If you’re not sure where your credit rating stands, you can always request a free copy of your credit profile. And if you have any questions about how you can get into a home loan that suits you, contact us today.

Confidence in Sydney’s rental market is starting to return as vacancy rates decline, according to the latest report from the Real Estate Institute of New South Wales (REINSW).

The vacancy rate in Sydney dropped to 3.4% in November, down from October’s rate of 4.3%. This is the lowest vacancy rate Sydney recorded since the first quarter.

All regions in Sydney reported declines in vacancies, with the inner-ring region dropping to 4.6%, the middle-ring to 4.4%. and the outer-ring to 1.8%.

“It’s been a long year and one that’s been full of challenges for everyone. When COVID-19 hit, many tenants were faced with the prospect of losing their jobs and had to make some hard financial decisions,” said Tim McKibbin, CEO of REINSW.

McKibbin said things appear to have started to settle, as people begin to return to work while other adopt a hybrid pattern of working.

“Overall, there’s a renewed confidence in what the future holds and this has had a flow-on effect to the residential rental market,” he said.

Vacancy rates in most regional areas in the state are also on the downtrend.

“The key message from this month’s results is that there is light at the end of the tunnel for both landlords and tenants,” McKibbin said.

A separate report by SQM Research, however, showed that rents continued to fall over the past month. Still, there are signs that could point to a reversal in the abundance of listings in Sydney CBD.

“They are still very elevated. But we could be starting to see some of the population moving back to the CBD and inner-city locations,” said Louis Christopher, managing director of SQM Research

Source: Gerv Tacadena at