LOAN TYPES
Commercial Hire Purchase
Commercial Hire Purchase or Asset Purchase, as it is sometimes referred to, is a product which enables the purchase of motor vehicles, trucks, equipment, machinery and boats for commercial use.
Product Features
- The total purchase price of the asset (including GST) may be financed
- On receipt of the final payment the asset becomes the property of the borrower
- Payments can be structured to suit the style of income streams, alleviating stress on cash flow
- Finance term up to 7 years
- Payments and interest remain unchanged for the life of the contract
- Equity in the goods increases as you make each monthly payment
- A balloon payment is an option at the end of the loan to reduce monthly payments
Product Benefits
- A deposit is not required therefore preserving working capital
- Builds equity in the equipment and in turn your business
- With payments fixed for the term of the loan it makes cash flow manageable
- During the term of the loan, interest paid and the depreciation on the asset are tax deductible for the borrower
Finance Lease
A Finance Lease is a method of funding the purchase of assets such as motor vehicles, trucks, equipment and machinery for business use. The funder owns the goods and leases them to you for an agreed term and rental.
Product Features
- The asset is 100% financed
- GST is not included in the amount financed – it is paid and claimed by the financier
- The total monthly rental is fully tax deductible
- The residual on the lease is set for the term of lease in line with depreciation guidelines provided by the Australian Taxation Office
- Lease rentals can be structured to suite income streams and cash flow
- Lease rentals are fixed for the term of the lease
GST is payable monthly on the monthly lease rental and residual value.
Product Benefits
- Preserves working capital
- The monthly lease rental is fully tax deductible
- The monthly lease rental is fixed for the term of the lease
Chattel Mortgage
Chattel Mortgage, also referred to as a commercial loan, is a method of funding for the purchase of assets such as motor vehicles, trucks, equipment and machinery for business use. This product has become very popular since the implementation of GST.
For eligibility for Tax Imputation Credits we suggest you seek confirmation from your accountant.
Product Features
- The total price of the asset (including GST) may be financed
- The borrower owns the equipment and provides it as security for the loan by way of a bill of sale
- The GST included in the purchase may be claimed as an Input Tax Credit in your next BAS statement
- Finance term up to 7 years
- The monthly payment and loan interest is fixed for the term
- New and used assets can be financed
- The equity in the asset increases as payments are made
- The monthly instalment and any Balloon payment does not attract GST
Product Benefit
- A deposit is not required therefore preserving working capital
- The GST credit that you may receive can be used to make a bulk payment off the loan, or retained in the business to enhance cash flow
- Builds equity in the equipment and your business
- The monthly payment is fixed for the term making cash flow management easier
- During the term of the loan, interest paid and the depreciation on the asset are a tax deduction for the borrower
Novated lease
A Novated Lease is an agreement between the financier, employer and employee (borrower).
The borrower obtains a loan from the financier for a motor vehicle of their choice for a fixed term.
Product Features
- The borrower has a choice in the motor vehicle they wish to drive
- The monthly lease rental is paid by your employer from your ‘pre tax’ salary allowing you to ‘salary sacrifice’ and in turn reduce your taxable income
- The leasing arrangement can be assigned to a new employer
- You have the opportunity to purchase the vehicle at the expiration of the Novated Lease
Product Benefits
- The borrower has total say in the vehicle purchased
- The opportunity to reduce personal taxable income
- Should you change employers you can take the vehicle with you allowing you to continue to drive the vehicle of your choice
- At the expiration of the Novated Lease you have the option to purchase the vehicle or upgrade