We sat down with Piers Shumack from Mint Home Loans to talk about why getting a mortgage broker onto your small business team is a smart move to get both your personal and business finances in order.
Thanks for chatting to The Fold, Piers. Last time we spoke, you had some great advice for anyone taking their first step on the property ladder. But you are equally passionate about helping small business owners.
I say it time and again that owning your first property is a great way to build a solid financial footing. But I’m also passionate about helping small business owners get the structure right so that their personal and business finances can be healthy and flourish.
There’s a bit of a myth among small business owners that getting a loan is hard. That isn’t necessarily true.
In my former life as a small business owner, I never really found a broker who understood small business and that’s what I am trying to help with. Over time, my own experience and knowledge taught me that it IS possible. But timing is everything.
That’s where the work of a mortgage broker can really compliment the work of financial planners and accountants.
I definitely believe in paying for good advice when it will pay for itself in the right situations especially for some of those more complicated structures such as self-managed super funds if you are not confident yourself. Working with a financial adviser can also definitely help with retirement planning because there is just so much to it.
Many of the people I deal with are savvy and experienced investors and they know what they are doing. But it’s very useful if you add some experts to your team. You want your mortgage broker to work with your financial adviser and your accountant so that everyone is on the same page especially when there are big changes coming to legislation or tax or in personal circumstances.
You have to position yourself to be financially healthy with whatever changes you are planning. You might want to move, downsize or buy some commercial property.
It might not seem obvious, but small business owners should reach out to a mortgage broker when it comes to their personal and business finances.
Yes, the thing is that small business owners wear so many hats. When it comes to financing, you want someone there to help take the stress out of the process and know that they’ve got your back in terms of managing the multiple moving parts.
For example, as you know if you go and get a car loan or some asset financing, this is going to affect what you do in your personal circumstances there is ways to mitigate this. So as a small business owner, it’s very interrelated. There is a lot of cross over and you really need someone to help you navigate through this.
And that is especially true when it comes to talking about self-managed superannuation funds?
Yes, there are not just the financial considerations. There are the legal structures. You need an accountant to set that up and in some cases need a financial adviser to help guide your decisions. That’s what great about SMSF if you are confident you can make your own decisions or if you need a little or a lot of help with the decisions then just get the mix right for you.
The part that I’m most passionate about is helping to secure the finance to buy properties within the fund and many people don’t realise that they can borrow to buy property within their fund. You can chat with your financial advisor about buying shares for example and diversifying your investments but I also have clients who solely run their own SMSF.
It’s simple enough if you have the right team.
There is also an opportunity to buy your own commercial or office space within the SMSF?
Yes. If you have your own self-managed super fund and you’re a small business owner, you can buy a commercial warehouse or office space and your business pays the rent to the fund. So, every time you pay rent, it doesn’t feel like you’re chucking money away. If you are a PAYG employee you can still buy commercial you just can’t rent it to yourself.
Of course, there are arguments for renting both ways, but just like with your own home, the premises are yours and you have that security and it’s a nicer feeling because it is yours. No one can tell you that you have to move which can be difficult if you have a solid business at those premises.
With this type of set up, eventually it will be yours.
Can you buy residential property within a self-managed super fund also?
Yes absolutely and if you need extra help sourcing an investment property there are buyer’s agents out there that can help also. One thing I would be clear with is you want a buyers agent who is working for you not just selling pre-determined investment properties, whether it is capital gain potential or rental return or both you are looking for.
It’s important to remember that you can’t move into the residential property or rent it to a close friend or family member. There are strict rules around this.
I’m just trying to help my clients get to the right funding decision that’s in their best interests. But you need to be careful, people can often fall into the trap of signing up to products that don’t really meet the needs of that individual. My motto is, if it’s not in my client’s best interests, I’m not interested.
I’m solely there for the client.
I guess it’s really important to separate the personal and business finances?
Absolutely, and that is where structure is so important and why working with the accountant to get on the same page can really help with planning those big purchases. There is always a better way to structure things that might not be obvious.
You have to think ahead to be financially healthy, especially when you are preparing for a move or some other big change or purchase. There’s not just the timing, but the order of things.
That also comes from personal experience. I know the difference of how to structure funding for my small business to make it work and I think the most important thing is to figure out the timing and order. I guess it can get complicated and you just want someone that gets it. You don’t want to have a broker that doesn’t understand small business.
You are already wearing so many hats. You don’t need more added to your plate nor do you want more problems.
Thanks Piers. Definitely food for thought for small business owners in the Highlands.
To learn more about how Piers can help take the hassle out of financing in your small business, pop over to Minthomeloans.au
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