Asset Finance

A summary on different asset finance solutions

What type of Asset finances are there

There are many types of asset finance offered by banks.  Choosing the right option has both cashflow and tax implication.  Make sure you engage the right advisor to give you advice on which option is best for you Contact us >:

Chattel Mortgage

You own the vehicle, which is then used as security.

  • 100% finance available to approved customers

  • Arrange a balloon payment at the end of the loan to reduce your regular repayments.

Hire Purchase

The bank owns the asset, but you can use it. You'll take over ownership once you've made the final payment.

  • An offer to hire can be arranged with no deposit

  • The vehicle being hired is normally enough security

  • Arrange a balloon payment at the end of the term to reduce your regular payments.

Novated Lease

The financier owns the asset, while you and your employer sign a novation agreement to share the responsibilities of the loan.

  • Monthly lease payments and a final residual payment are based on your circumstances and guidelines set by the Australian Taxation Office.

  • If you are interested in a Novated Lease, talk to your HR department for options.

Operating Leases

Operating Leases can often be used to fund many different assets. Payments towards this type of finance can sometimes be considered operating costs and will not appear as a liability on your balance sheet:

Fleet Operating Lease

 

With this type of finance, the financier owns the vehicle and the client returns it at the end of the term, usually from 12 months to 5 years. When leasing a vehicle, the fixed monthly payments typically cover registration, insurance, tyres and scheduled servicing and maintenance. For a small business, a Fleet Operating Lease can help free up time and resources.

 

Technology Rentals / Lease

 

Technology can change quickly and often the large up-front costs of purchasing the latest equipment will make a big dent in your cash flow. Renting rather than owning technology can help reduce the risk of owning obsolete equipment while preserving cash to grow your business.

 

Similar to a Fleet Lease, the financier owns the equipment and the client returns it at the end of the term, usually within 3 years.

Master Rental Agreement

A master rental agreement with a pre-approved limit. You can draw down on funds at any time to acquire equipment – you don’t need to apply for additional funding and you repay the amount over the agreed term in monthly instalments.

Asset Import Finance

Sometimes, assets that you buy from overseas needs to be paid for before the asset arrives to Australia. Traditional asset finance requires the asset to be immediately accessible by the financier.  A more structured solution is needed for imported assets.

Although the list of assets that can be finance directly is extensive, there are a number of common categories:

 

  • Cars: by far the most common form of asset finance

  • Other vehicles: trucks, buses and other road vehicles

  • Agriculture machinery: tractors, farming equipment etc

  • Plant and equipment: machinery, pallet racking, refurbishments and office equipment  

  • Technology: traditional hardware as well as softwares

  • Medical: CT Scanners, MRIs, ultrasound equipment, X-ray equipment, Nuclear medicine PET etc

  • Aircrafts: Airbus, Boeing, Bombardier and others

  • Energy efficient: renewable energy assets

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All too complicated?

 

Running a business is hard enough, if you want some advice on which Asset Finance provider is best for you, feel free to contact us.

December 12, 2018

There are many types of asset finance offered by banks. Choosing the right option has both cashflow and tax implication. Make sure you engage the right advisor.

November 7, 2018

What is a novated lease? This type of lease is essentially an approach to finance a vehicle. Explained simply, a novated lease is a way for an employee to buy a new or used car and have their employer assist in the organised repayment for that car to an agreed financia...

January 1, 2018

There are many types of asset finance offered by banks. Choosing the right option has both cashflow and tax implication. Asset finance is a type of finance used by businesses to obtain the equipment they need to grow. It usually involves paying a regular charge for u...

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