Thinking About New Equipment Finance in Australia?

Having the right equipment ensures your business operates at the highest level of productivity. By using finance to acquire equipment in most cases, it allows you to achieve an immediate return on investment. For example the new equipment can generate income and create savings that will offset the low monthly payments. That’s where Equipment Finance in Australia can help.

We can help you arrange the best business finance loans facility that can make all the difference to your business achieving it’s goals and that’s Finance@work.

Some examples of the equipment that we finance includes but is not limited to.

Equipment finance allows businesses to purchase or lease the machinery, tools, and technology needed for their operations. This can include a wide range of equipment types, from heavy machinery and vehicles to computers and office furniture. Here’s an overview of equipment finance, including types of financing, considerations, benefits, and steps to secure financing.

Types of Equipment Finance in Australia

Rental and Operating Leases

An option that works well for all types of equipment, these facilities allow you to acquire the equipment when it’s needed to keep up with growing demand and to improve productivity. Rental and operating leases are generally more flexible in approvals, management of the assets during the term of the agreement and the end of term options available.

You can Upgrade, Purchase or Return the Equipment at any time during the agreement to ensure you have the right tools and equipment key to your Business’s success**.

End of Term Options including:

• Upgrade the Equipment to the Latest Technology available.
• Return the Equipment.
• Continue to rent month to month.
• Extend the Rental for further fixed term at a discounted payment.
• Make an offer to purchase the Equipment.
• This finance type carries the added benefit of being 100% tax deductible and may qualify for off balance sheet accounting.*

Finance Lease Australia

Finance Lease give you a low fixed monthly Instalment over a fixed period with a residual value at the end of term. 

When choosing a residual value, it must adhere to ATO guidelines, the higher the value of the residual, the lower monthly Instalments. 

The benefits of a Finance Lease include:

• Payments are 100% tax deductible if the equipment is used for business purposes*.
• Flexibility to upgrade to new equipment at the end of term.
• At the End of Term you make an offer to purchase the goods from the Financier at the Residual Value.

Chattel Mortgage / Equipment Loans Australia

A Chattel Mortgage or an Equipment Loan works much in the same way a commercial loan does – you pay back the loan in instalments on a monthly basis.   

Benefits of a Chattel Mortgage:

Provided the equipment is used 100% for business purposes, you are able to claim the interest paid on the facility and depreciation on the equipment as a tax- deduction.* 

If the Business is registered for GST, you may be eligible to claim some or all of the GST upfront, rather than over the term of the loan.* 

Deposits are optional but not generally required, and you can buy the equipment at any time during the agreement. You may also choose a balloon payment at the end of the term to decrease your monthly commitments.

Benefits of Equipment Finance

Cash Flow Management: It helps businesses spread out the cost of expensive equipment, preserving working capital for other needs. 

Tax Benefits: Payments made under certain types of finance agreements can be tax-deductible. 

Flexible Options: Businesses can choose from various finance options tailored to their specific needs and financial situation. 

Up-to-Date Equipment: Leasing options often allow businesses to upgrade equipment regularly, ensuring they have access to the latest and most productive technology.

Considerations

Repayments and Rates: Do the repayments fit in with your budget

Repayment Terms: Ensure terms match the equipment’s useful life

Down Payment: Assess if a down payment is required and its amount

Equipment Lifespan: Align the financing term with the expected lifespan of the equipment

Tax Implications: Understand potential tax deductions and obligations

Cash Flow Impact: Evaluate how the financing terms will affect your business cash

Financing equipment is a crucial decision that can significantly impact your business’s efficiency and growth. By understanding the various options and carefully evaluating your needs and financial situation, we can help you can choose the best financing strategy to support your business goals.

* The above should only be used as a guide, please contact your Accountant or Financial Adviser for more information.

** Conditions Apply

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