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We Get Equipment Finance Options

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We can get you the best - Equipment Finance Option

We have access to all the major Lenders. Are you looking to buy Equipment?  You can purchase the equipment using different options. 

Specific Security Agreement ( Chattel Mortgage), Hire Purchase, Lease or Rent

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Equipment is most often purchased with a Chattel Mortgage (95%). But that is not always the best option.

Your accountant is who will best advise you as to which method best suits your business and circumstances.

We can assist with all these Equipment Finance options:

  • Specific Security Agreement – (Chattel Mortgage)
  • Commercial Hire Purchase
  • Lease – Finance or Operating
  • Rental Finance

It depends on your business which accounting method and product are best. Speak with your accountant to confirm.

What is a Specific Security Agreement (Chattel Mortgage)?

Small to medium-sized businesses that account for their business using the Cash Method can benefit from a Specific Security Agreement (formerly Chattel Mortgage) facility.

You have full use of the equipment during the term. You have the security of a predictable monthly payment. Include either a deposit or an end of term “balloon / Residual” to lower the monthly payments.

Unlike other products, however, you have ownership of the equipment from the beginning. In other words, the loan is secured by a mortgage over the equipment.

Specific Security Agreement/ Chattel Mortgage Features

  • Subject to credit approval, finance 100% of the purchase price
  • The financed equipment is all the security required in most cases
  • Standard Terms range from 3 years to 5 years but can be varied to up to 7 yrs
  • The interest rate is fixed for the term
  • Claim the GST component of the purchase price in your next BAS period
  • You can use the GST refund to contribute towards paying off the loan, thereby reducing the amount financed and the interest paid over the term of the loan
  • Option to have a balloon payment at the end of the term which will reduce the payments during the term
  • Repayment can be structured to by Quarterly, Bi-Annually or Yearly
  • No GST is charged on the payment

Specific Security Agreement/ Chattel Mortgage Benefits

  • Interest and depreciation is tax deductible if the asset is used for business
  • Customers can claim the GST in their next BAS period
  • The repayments are fixed over the term
  • You can choose terms from 1 to 8 years
  • You gain equity in the equipment over the term
  • A balloon payment will lower your regular monthly payments.

What does Balloon mean?

A balloon is an amount that will need to be paid at the end of the term (much like a residual on a lease). Having a balloon put into your agreement lowers the payments which might better suit your cash flow and whether you have a balloon or not is entirely up to you. However, you may choose to pay the loan down to zero. This means once the final payment is made there is nothing else to pay.

A balloon is an amount that will need to be paid at the end of the term (much like a residual on a lease). A balloon in your agreement lowers the payments. This might better suit your cash flow. Whether you have a balloon or not is entirely up to you. However, you may choose to pay the loan down to zero. Therefore, once the final payment is made there is nothing else to pay.

What is a Commercial Hire Purchase (CHP)?

A Commercial Hire Purchase (CHP) is a facility under which you obtain goods by hiring them over the term, with title transferring to you after the last payment.

It will suit your company if you use the ‘accrual’ (turnover >$1m p.a.) method of accounting for GST. It may also be suitable if you use a car for business related purposes.

Under the ‘accruals’ method, the GST component of the purchase price can be claimed back on your next Business Activity Statement, rather than claiming the GST over the term of the finance contract.

Commercial Hire Purchase Features

  • You can either finance the total purchase price or use a deposit or trade-in to reduce the loan repayments
  • You do not become the owner of the equipment until all payments are made under a CHP arrangement
  • You can even use the GST refund to contribute towards paying off the loan, thereby reducing the amount financed and the interest paid over the term of the loan
  • You can have a balloon payment at the end of the term that will reduce the payments during the term
  • You can structure the repayments with or without a balloon payment at the end thus tailoring your repayments to suit your cash flow

Commercial Hire Purchase Benefits

  • Claim a tax deduction for the depreciation as well as the interest paid each financial year
  • GST is not payable on the repayments as they are calculated using the GST inclusive price
  • Subject to credit approval, finance 100% of the purchase price
  • The repayments are fixed over the term
  • You can choose terms from 1 to 5 years
  • You gain equity in the equipment over the term
  • No GST is charged on the payment

We can help with the following Lease Options

Finance Lease can be a cost-effective way for a company to acquire assets. Financing costs are calculated on the price of the equipment for an agreed time frame in return for a series of payments.

Most contracts are very flexible and will allow you to choose either to pay monthly, quarterly, semi-annually or annually.

If you have a business that experiences seasonal income, you can choose to make your repayments on a seasonal or irregular basis.

An Operating Lease is where you pay to use vehicle/equipment over a fixed period with one payment per month covering all costs associated with the vehicle/equipment.

You may also choose this product if you do not necessarily wish to own the equipment at the end of the term.

What is Rental Finance?

Rental Finance is best suited to those clients that:

  • Have just commenced in business and have no trading history but good work contracts moving forward
  • Need finance for rapidly depreciating equipment which will need to be replaced regularly
  • Require Off Balance sheet lending which will provide the equipment they need but only show as a rental cost to the business on the Profit & Loss, effectively reducing the companies taxable income
  • Has a tax debt and the major lenders will not consider them

Rental Finance Features

  • No upfront bonds required (certain lenders)
  • Hand the equipment back at any time if no longer needed
  • Payments are tax deductible thus reducing the companies taxable income
  • Your choice of equipment from your supplier
  • Equipment up to $500,000 considered
  • Choose from a range of used equipment that the lender has in stock at greatly reduced prices
  • Payout the finance at anytime or annually
  • With each monthly payment, you are growing your equity in the equipment so that you own the equipment for $1 at end of term

Rental Finance Benefits

  • This type of equipment finance is growing in popularity as it allows businesses to start up and provides the required equipment to enable a business to prosper. Quite often without this type of finance, many businesses could not even start up.

Approval Options

There are also different ways of getting finance approval for your equipment purchase. Working together with our experienced finance brokers, we can decide which is the best option for you and your business.

The options include:

  • Low Doc
  • Medium Doc
  • Full Doc
  • Balloon Refinance
  • Replacement Finance

 

Go to our Finance Approval Options Page to find out more.

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