Finance Types

Every business requires assets to function and operate. Whether it’s a car, a delivery van, new computer system, forklift or machine the cost is considerable and represents a substantial investment.

Financing the acquisition of business assets presents several benefits:

Conserves Working Capital:
Capital equipment is purchased without using operating capital for funding. Cash can be invested into other areas of the business and provide a valuable buffer to allow for financial stability.

Flexibility:
Finance packages can be structured for various terms and with or without a balloon payment, meaning that monthly repayments can be matched to suit cashflow.
Generally monthly payments remain fixed for the life of the loan contract, so there is a predictability about financial commitments.

Also, the term of finance can be matched to the expected life of the asset, ensuring that payments are not being made on equipment that is no longer contributing towards income generation.

Tax Deductions:
Financing offers tax effectiveness. While tax detectability and treatment varies between different finance types, in essence the “cost of finance” (e.g. interest fess and so on) is treated as a business expense, thereby reducing taxable income.

Tax detectability is determined by the extent to which goods are being used to generate assessable income.

We're often asked about the types of finance options that are available and which option is best. There is a range of finance packages available, each with different features and benefits, so there's a package to suit different needs.

Chattel Mortgage
A Chattel Mortgage is a “GST friendly” loan and a method of finance which is most common for business.
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Hire Purchase
Commonly known as Commercial Hire Purchase (CHP) or Asset Purchase, this style of financing enables the purchase of goods by means of time payment with guaranteed end ownership.
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Lease
The term "Lease" is often used generically to mean finance. However, this form of finance has specific features and also incorporates some variations, providing even more options for the borrower.
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Debtor Finance
This type of “cashflow” finance (also known as “Factoring” and “Invoice Discounting”) is a method of raising working capital against outstanding debtors/accounts. It provides an alternative to traditional borrowing and offers flexibility for business funding.
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Cashflow Finance
Cashflow finance offers a faster and simpler access to funds and relies on business earnings rather than relying on business assets as collateral for the loan.
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Premium Funding
This form of finance spreads the cost of annual insurance premiums (e.g. PI cover, WorkCover) for business operators, effectively providing business clients with
pay-by-the-month insurance.
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Finance Types

Financing the acquisition of business assets presents several benefits:

Need more information?

Call us today on (03) 9005-6633 and experience the difference!

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