Our expert finance brokers can help you with your business finance needs.
We can look at financing for assets such as:
- cars
- trucks
- yellow goods (earth-moving equipment, forklifts, tractors, etc.)
- plant and equipment
- business loans for multiple purposes
- finance to manage your cash flow
Discuss our range of equipment financing options with us, which can provide exactly what you need to maximise your opportunities.
Why use equipment finance in your business?
Many businesses lack sufficient funds to purchase income-generating equipment outright. Buying equipment with financing allows it to be paid for over a number of years, rather than in one payment, which makes it more affordable.
Equipment financing is also a popular alternative to a standard business loan. That’s because the financing may often be arranged with the new equipment as collateral, reducing your overall financial risk. It also allows you to preserve your savings for use in other areas of your business, should the need arise.
Typically, equipment financing allows you to finance 80 to 100 per cent of the cost of the equipment you need, so it can potentially help you with a deposit. Many lenders also offer flexible payment terms to help you maximise your cash flow. There may also be substantial tax benefits, so check with your accountant to see how they may apply to you.
What kind of equipment financing options are available?
The type of business you have and the purpose of the equipment you need will often determine the type of equipment finance that is right for you. However, we could assist with these different types of equipment financing options:
Chattel Mortgage
This is a straightforward loan where you own the equipment. The equipment itself serves as collateral for the loan. Once the loan is paid off, the mortgage is removed, and the vehicle or equipment is officially yours. Most commercial asset finance is done as a Chattel Mortgage.
Advantages:
- * If you’re registered for GST on a cash basis, you may be able to claim the GST in your vehicle’s price up-front through your next Business Activity Statement (check with your accountant).
- * GST is not payable on your repayments
- * You may be able to claim depreciation and the interest charges on your chattel mortgage as a tax deduction (again, consult your accountant)
- * Lower interest rates generally apply as finance is secured against the asset
- * You may be able to decrease your regular repayments by paying a deposit upfront, trading in a vehicle, or opting for a balloon payment at the end of your loan term
- * You can manage your business cash flow more effectively.
Asset Lease
An asset lease is an option that leaves the lender to retain actual ownership of the equipment. You pay a fixed monthly lease rental for the term of the lease. Then, you have the option to pay the residual and take ownership of the equipment, sell the equipment to pay out the residual, or refinance the residual to continue the lease.
Advantages:
- * You’ll know what your payments are and can manage your cash flow accordingly.
- * You may be able to claim the lease payments as a tax deduction (speak to your accountant).
- * There could be other tax benefits, including potentially making advance lease payments for tax or cash flow purposes (again, it’s best to consult your accountant).
- * You may be entitled to claim a GST credit for the GST included in each lease payment.
- * There’s the flexibility to reduce the size of your payments by increasing the residual amount at the end.
- * You can keep your assets up to date, and some equipment leases can potentially include a service contract.
Commercial Hire Purchase
With this option, the lender purchases the equipment and hires it back to you for a set period of time. At the end of the contract term, once it has been fully paid, you will take ownership of the equipment.
Advantages:
- * Won’t tie up your cash
- * Generally, it doesn’t require additional security
- * Depreciation and interest on any lease repayments may be tax-deductible (check with your accountant)
- * You own it at the end of the hire period.
Every business is unique, and it is essential to carefully consider each financing option before selecting the one that best suits your business and objectives. We recommend discussing your financing options and their tax implications with your accountant before meeting with us to discuss your needs. Please let us know if you need a referral to a reliable accountant.
What kind of equipment can you buy?
Almost any kind of equipment can be purchased using one of these asset financing options, provided it is being used for legitimate business purposes. Some types of equipment commonly purchased with asset financing are:
- * Computers and IT equipment
- * Trucks, buses, and heavy commercial vehicles
- * Company fleet vehicles like cars and delivery vans
- * Earthmoving and excavation equipment
- * Industrial plant equipment like printing presses, factories, and production line machinery
- * Agricultural and farming equipment
- * Healthcare, scientific, and medical equipment
If the equipment you need is not on this list, that doesn’t mean we can’t arrange finance for it! Tell us about your requirements, and we’ll help you find the right deal tailored to your specific circumstances and financial situation. As with mortgages, we can source financing from a wide variety of lenders, which helps to ensure that you get the right deal for your purposes at a great rate.
Remember, tax time is an ideal opportunity to maximise EOFY sales and take advantage of tax deductions for your business. Ensure you consult with your accountant to verify that it aligns with your business’s needs.