Our Product focus What business assets can I finance?

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1 Welcome to our December Electronic Newsletter. As 2012 draws to a close on behalf of all of us at 'Commercial Point Finance' we wish you and your family best wishes for a happy Christmas and a safe New Year. We look forward to being of service to you in Please note that our office will be closed from Monday 24th December and we will return on 2nd January We provide a range of finance facilities including: Asset finance - Cars / Trucks / Excavators / Equipment IT - Hardware and software Debtor finance Insurance funding Escrow funding Commercial property loans Our Product focus What business assets can I finance? We often have business clients asking whether they can finance; Software packages (off the shelf) IT - desktops, laptops, tablets, networking, (including install, commissioning) Security and access control systems Telephone/VOIP systems Point of Sale and Audio Visual Systems Catering equipment These assets would generally not be financed by some financiers without additional security being held (such as cash or property) or perhaps they would not be financed at all! Due to our access to a wide range of financiers we now have a finance solutions available that subject to credit approval no additional security such as cash or property security is required. Commercial Point December 2012 Newsletter Page 1 of 6

2 Whatever type of equipment you are financing make sure you talk to us about your requirements. RBA Announcement - rates cut by 0.25% The Reserve Bank of Australia has given homeowners an early Christmas present by announcing a cut in interest rates. As predicted by a majority of economists, the cash rate now stands at 3.00%. Overall, the expectations look positive as we head into retail trade has been steady leading up to the busy period, Australian bond futures are slightly higher and the property market is holding firm. On the topic of real estate, RP Data senior research manager Cameron Kusher said," stable market conditions, due to expectations of low interest rates over the medium term, were creating the right environment for a recovery." The Australian Bureau of Statistics has also released economic growth data for the September quarter. It shows that the economy grew at 3.1 per cent - a healthy rate and strong by global standards. Naturally, if you need any advice about your investment options or require any further information, please don't hesitate to call us. Are you looking at changing Banks? We often have client s asking "Can you assist in finding a Bank that understands our business?" As an additional service to our business clients we have contacts within the Banks that can discuss your requirements. If you are looking at alternatives please take the time and talk to your Centrepoint Finance representative. They will be happy to assist you. Product Focus: Life Insurance Life insurance is an important issue to consider when thinking about financial planning. Nobody wants to imagine the hefty medical costs incurred from a debilitating disease like cancer, not to mention the agonizing loss of income from not being able to work. And so, life insurance should play a core part in your financial planning process. Life insurance is a straightforward process - when an injured person passes away, the enterprise pays a prearranged sum of money to the designated beneficiary. Depending on the terms set out and the plan you opt for, this money can either be paid after a set period of time, or upon the death of the Commercial Point December 2012 Newsletter Page 2 of 6

3 insured person. Today there are plenty of companies on the market that offer a wide range of contract options. Do your research in order to narrow down which plan is most suited for you and your family. Many of these companies now offer a free consultation to help you along to way, so it makes sense to take advantage of it. Also, pay close attention to the medical conditions covered, the terms expressed, and the criteria they set for claims. More Than Life Insurance Experts advise that a variable life insurance policy can give your investment portfolio a major boost, as it allows you to invest in stocks, bonds and mutual funds. Consider being cautious about your investment ventures though - opt for a plan that allows you to limit your risks with a guaranteed minimum death benefit. Ultimately, if you have dependents who are counting on you financially, life insurance should be in your best interests. This is a great time to think about you and your family's needs, and plan for a comfortable future. Make this New Year's resolution to have your insurances well and truly in order. If you have any further questions on life insurance, feel free to drop us a line. First Home Buyers - Will the time be right early 2013? You're probably no stranger to the phrase "timing is everything". This is especially true when discussing something as momentous as your very first home purchase. The good news is that housing affordability has risen to the same level as it was back in March The first home buyer index fell by an entire 9 points, down to 114 over the past year - the biggest fall we've seen since the index was launched. These significant improvements in the homebuyers market have been assisted by a drop in interest rates and a rise in wages, while property values and average first home loan sizes have remained at a comfortable standstill. According to the figures, Victoria experienced the largest improvement in affordability, with a drop of 12 points. Tasmania and South Australia followed closely as they each dropped 11 points. REIWA figures also suggest a great deal of positivity across the housing market. 2012's median house prices in Perth were $475,000 in March, which then rose to $484,000 later in the year, but eventually returned to $475,000 in September. The Signs Are Looking Good Commercial Point December 2012 Newsletter Page 3 of 6

4 So how does the future look for Australia's economy in 2013? Well, there is a wealth of optimism floating around - China's economy is booming, and capital investment plans in Australia's resources sector are also steadily climbing. Stuart Cox, chief executive of Harcourts Real Estate is confident that there are "prospects for strong growth from both inside and outside the Australian mining sector, signalling that the economy should bounce back strongly in the medium term". Further interest rate cuts are also quite probable. As always, feel free to drop us a line if you have any additional concerns regarding your first home purchase. We're more than happy to help. Debt vs Savings - Get the Best of Both Worlds in 2013 While getting out of debt and saving money remains as one of the most popular New Year's resolutions, unfortunately it does not always work out the way people intended it to. However, with a bit of clever planning and preparation, you can easily keep your finances at a healthy state this coming year. Nobody would board a plane without first agreeing upon a destination, but this is essentially what happens with many people's finances. Financial planning needs to stay on target - if you don't have a realistic goal, saving and investing will feel disorganised and meaningless. Before anything, decide on a goal that you'd like to accomplish this year. Write it down and pop it on the fridge so you're constantly reminded of it. Next, figure out how much money you need to make it happen, followed by your course of action to obtaining it. The Common Sense Approach Then, there is the question of "should I repay my debts first, or put that money into savings?". While many advisors preach firm strategies that strongly argue for one or the other (and there are great arguments for both), it ultimately depends on your personal circumstances. High credit card interest rates can be daunting to have looming over your financial health, and savings rates are often only a fraction of what you would be paying through debt interests. So, logically you would deduce that your money is better spent paying off your high interest debts, than investing further. Considering the maths adds up, this is a great strategy, however leaving nothing for savings, comes at a risk. If you are unexpectedly made redundant, you are quite likely to struggle if you have neglected to save. While many financial advisors might not be enthusiastic about saving before paying off debts, it may be the best course of action for you. As mentioned, your job security is something to bear in mind, and with today's economy making obtaining credit tight, a cash reserve for those emergencies is becoming increasingly important. Commercial Point December 2012 Newsletter Page 4 of 6

5 If you have any questions, please do not hesitate to contact us. Renovating - avoid the pitfalls by doing your homework first Australians are not only avid homebuyers, but also renovation fanatics. Unfortunately, we're not all experts at renovation - many people end up over their head before they've even begun. Here, we shed some light on a few common pitfalls associated with renovating. Do your homework If you take the necessary precautions to ensure that all your finances are in order, you are less likely to go over budget. Budget problems are far more likely when renovation plans are ill-prepared: you don't want to get to the point where your savings are being eaten into and you've already redrawn all three credit cards by the time the first bathroom has been renovated. Be aware of your mortgage contract - you may need to inform your mortgagee of any dramatic renovations you wish to have done to the house before you can even start. Don't risk having your mortgage contract breached. Research, research, research. We can't stress enough that you do your homework. If you are looking to purchase a home for purposes of investment via renovations, check how long the property has been on the market. Most properties that have been sitting on the market for more than a few months are likely still there because there is not much profit to be made. Location usually plays a part here, so perhaps reassess your choice of area. Investment properties Many of you may be considering buying an investment property, renovating it to add value, and then selling it off for a profit. While this is a great investment plan, a common pitfall to avoid is buying a place that requires an impractical amount extensive renovation. These places as referred to as 'moneypits' - your budget may be burnt out by the time half the renovations are complete. This however, is easily avoided by employing an expert. Don't just get one quote - get three. It will pay off to know what you're letting yourself in for. If you have any questions regarding renovations, please don't hesitate to contact us. Commercial Point December 2012 Newsletter Page 5 of 6

6 The contents of this document are intended for information purposes only and may contain personal opinions of the author. It is not intended to be a substitute for specific financial or legal advice. Before making any decisions you should consider your personal situation, objectives and needs. While all reasonable care has been taken in the preparation of this information, we take no responsibility for any actions taken based on the information contained in the newsletter or for any errors or omissions. Commercial Point Finance PO Box 500, Forestville NSW 2087 Phone: Fax: Mobile: bscotter@cpf.com.au Commercial Point December 2012 Newsletter Page 6 of 6