We strongly recommend consulting with your business Accountant first before deciding to pursue equipment finance, there may be tax impacts depending on your selected option. Most small to medium business utilise a Chattel Mortgage due to its straightforward structure and taxation benefits. We go into more detail on your options below.
Other asset finance products are:
The equipment belongs to you from the beginning and the lender has a ‘charge’ over the equipment that secures the loan until the final payment’s made. A major benefit is that you can claim the GST on the purchase on your next BAS claim.
A Hire Purchase Agreement is when the lender agrees to purchase the vehicle on your behalf and then hires it back to you over a set period. You’ll have full use of the vehicle for the term of the contract, you just won’t be the owner. At the end of the term, when the total price of the vehicle and the interest charges have been paid in full, the customer can then take ownership of the vehicle. This can be a good choice if you are registered for GST on an accruals or cash accounting basis.
A finance lease is a form of finance that allows a customer (that’s you) the use of a vehicle/equipment while enjoying all the benefits of ownership. However, technically the financier owns the car until you finish your lease term and make the necessary residual payment. Agreements are flexible and payments can be calculated monthly or quarterly, half yearly or annually. At the end of the term, a residual value is paid (predetermined at the commencement of the lease) to acquire the goods from the financier. This way your rentals can be structured to meet your cash flow requirements.
We have access to lenders who will finance items at a cost as low as $5,000.00.
Conditions and price vary from lender to lender, but options do include not having to provide financial statements for transactions up to $25,000.00.
An operating lease is a type of lease in which the financier retains ownership of the asset. Under an operating lease there is no predetermined residual value to pay, however a client may choose:
Under a novated lease, an employee leases a motor vehicle from the financier using a normal lease agreement. A novation agreement is entered into between the employee and the financier, under which the employee’s obligation to pay the rental is transferred to the employer for the term of the agreement or until employment ceases. Therefore the employer pays the lease rentals direct to the financier.
The car remains with the employee should he leave the employer and a new novated agreement can be entered into with a new employer.
There may be tax advantages to all parties under a novated lease agreement.
Annual insurance premiums exceeding $10,000.00 can be funded over six, nine or twelve monthly payments, which can assist with your cash flow requirements.
A consumer loan is when a person borrows money from a lender (rather than a company or a trust). There are several types of consumer loans however the main types are either an unsecured or secured loan.