02 9683 5999Purchasing assets such as equipment and vehicles is a significant financial undertaking. To help you preserve your working capital, there are range of equipment and car finance solutions with payment plans that can be customised to your cash flow.
A choice of equipment financing options are:
Commercial hire purchase
A hire purchase arrangement is an agreement to purchase vehicles, plant or equipment subject to payment terms. During the term of the agreement, the lender owns the vehicle, plant or equipment.
Ownership is automatically transferred to you when you make the final payment. You also have the option to purchase the equipment at any time during the term of the agreement.
Features
- Repayments can be tailored to your cash flow.
- Irregular and seasonal repayment plans are available.
Business benefits
- You own the equipment when the final repayment is made.
- You can purchase the equipment at any time during the term of the agreement.
- There is no need for a deposit.
- Flexible repayment arrangements maximise cash flow.
- The interest component of the repayments and the depreciation on the equipment may be claimed as tax deductions, provided the equipment is used to generate assessable income.
- GST Claimable up front if you are on the accruals basis.
Chattel Mortgage
Chattel mortgage is a loan agreement where you borrow funds to acquire an asset.
Features
- May be used to finance most equipment that generates income
- Minimum finance amount of $10,000 and no maximum.
- Loan can be structured with or without balloons, and with payments in advance or arrears.
- Interest rate and repayments are fixed for the term of the loan. Business benefits
- You are generally not required to provide a deposit.
- Repayments may be tailored to suit your cash flow.
- You don’t pay GST on the loan or the repayments.
- You retain ownership of the asset throughout the loan’s term of the loan.
- The interest component of the payments and the depreciation on the asset may be tax deductible, provided you use the equipment to generate assessable income.
Finance Lease
A finance lease provides 100% finance to acquire equipment and vehicles for use in your business. A finance lease is a rental agreement where the lender owns the equipment or vehicle and you then lease it for an agreed term and rental amount.
Features
- Most depreciable vehicles can be financed.
- Minimum finance lease amount is $10,000 over terms that can range from two to five years.
- Interest rate and repayments are fixed for the term of the contract.
- Irregular or seasonal payment schedules can be considered to suit your cash flow.
Business benefits
- Preserve your working capital with 100% financing.
- If you use the asset to generate income, rental payments may be tax deductible.
- You may be entitled to claim an input tax credit for rental and other charges that are subject to GST.
Novated Lease
Novated leasing from the Bank provides a flexible, portable and convenient way to acquire a motor vehicle as part of an employee’s salary package.
Employees lease a motor vehicle of their choice and while they remain employed, their employer agrees to pay the rentals and other running costs (if applicable) directly from the employee’s gross salary.
Features
- Minimum novated lease amount is $10,000 over terms that range from two to five years.
- Interest rate and repayments are fixed for the term of the contract.
- Leases may be structured as either finance lease or operating lease and may include the option of vehicle maintenance and acquisition.
- The lease is portable so employees can take the vehicle with them should they change employers.
Business benefits
- There may be tax advantages for the employee’s remuneration package and professional advice should be sought.
- Novated leasing may be a more cost effective alternative to operating a fleet of company vehicles
- Employee vehicles are ‘off balance sheet’.
- Time and costs associated with the management of the vehicle are not the employer’s responsibility.
