Equipment Financing and Leasing

Money Heroes can help you with hassle free financial solutions for your business.

We understand that cash flow is critical to your business and that you need to keep dollars aside for the day-to-day running or expansion of your business.

Often the most tax and cost effective way for you to replace equipment or buy new items is to use one of a range of financial options. Covering most new and used equipment, we can provide options in Chattel mortgage, commercial hire purchase or leasing.

Structured facilities mean you can pay according to your cash-flow either monthly, quarterly or annually

Some types of Equipment that can be financed for your business are:

• Office fit-outs, phone systems and computers
• Vehicles
• Construction equipment –Cranes, Earthmoving equipment, trucks, forklifts
• Engineering equipment
• General manufacturing equipment
• Medical and dental equipment and machinery
• Printing equipment
• Truck and transport

There are so many specialist areas in which we can help, so if you don’t see your requirement above, don’t worry!
Just call us on 1300 MY HERO (1300 694 376) and we can let you know if we can assist or contact us 

Understanding different types of vehicle and equipment finance

Hire Purchase

Hire Purchase is a rental agreement where the goods automatically become yours once all terms of the agreement have been completed. For tax purposes you may be able claim equipment depreciation and interest paid against your business income. Obviously the amount will be determined by your own accounting advisor depending on your percentage of business use of the goods or equipment.

If you prefer, you may pay an upfront deposit by way of cash or trade (depending on the type of goods purchased) to reduce your rental repayment. A balloon payment may also be set at the end of the term which also reduces your rental commitment. The balloon amount is normally structured according to the predicted value of the goods at the end of the term. Otherwise, you can choose to amortise the loan completely by the end of the term, ie pay it off in full.

Chattel Mortgage

This loan operates as a mortgage, or in essence a charge, over the goods. Effectively you own the goods from day one. Your repayments and interest rate are fixed for the term of the Chattel Mortgage agreement. Once again you may structure upfront payments or balloons into the agreement to reduce the payment commitment which may assist with cashflow. Payments on a Chattel Mortgage agreement are not subject to GST.
The Chattel Mortgage may allow businesses who operate under a ‘cash accounting’ basis to claim the full input tax credit from GST incurred expenses on the purchase immediately. So if the GST amount of the purchase was $3000, you may be able to claim this on your next BAS.

Lease

Finance Lease is a form of rental agreement under which you lease the goods for an agreed term and rental amount. A residual value is set to reflect the equipment's value at the end of the term. For example a vehicle purchased new may be worth say $40,000.00. The residual could be set at around 30% of this value or $12,000.00.

The goods are owned by the finance company, leased by you. The lease rentals are tax deductible to you, as long as the goods are used in connection with producing assessable income. Please ensure you seek qualified advice from your accounting and taxation advisor.

At the end of the Lease you can make an offer to purchase the equipment from the finance company, trade it in on a replacement depending on the type of goods or extend the lease for a further term.

Novated Lease

A Novated Lease is an agreement between 3 parties - the employee, their employer and the financier.
A Lease (refer above) is created between the employee and the financier. A Novation Agreement or Deed is then entered between all parties, the employee, employer and financier. This transfers the responsibility for the lease payments to the employer whilst the employee is working for them.

On termination of employment, this novation agreement ends. The vehicle remains with the employee who resumes full responsibility for the lease payments.

 

To contact your local Money Heroes call 1300 MY HERO (1300 694376) or click here