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Everything you need to know about Asset & Equipment Finance

Asset & equipment financing frees up capital to be used elsewhere…

Buying cars, machinery, marine assets, and business equipment can be an expensive endeavour but often it’s necessary for the success and growth of a business. Alternatively, it’s a simple case of not wanting to be out of pocket for a personal purchase such as a new boat or desired car.

Posted: 01/11/2021

Fortunately, at Mintwell Capital we provide various finance options specifically for this.

Asset and equipment finance is an important part of business growth, especially concerning businesses that require additional financial assistance in order to expand and flourish. Within asset and equipment finance, there are a plethora of finance options available to suit various needs and requirements that you might have. Let’s delve into those options now… 

Chattel Mortgage

Chattel Mortgages work similarly to Home Mortgages; the asset/equipment is financed by the finance company on your behalf and the asset being purchased becomes collateral for the loan. Chattel Mortgages are specifically for mobile, transportable property such as a vehicle, or machinery. Essentially, the financier has a mortgage over the asset until it has been paid off- then the asset belongs to you. Chattel Mortgages are suitable for both businesses and individuals but are especially a good choice for those who are registered for GST on a cash accounting basis, as you should be able to claim the GST from the vehicle’s purchase price as an input tax credit on your next Business Activity Statement.

Consumer Lending

With Consumer Lending, the financier lends you money to purchase the asset (cars, lifestyle and marine assets, etc.) and retains security over it for the life of the loan. Consumer Lending is suitable for both businesses and individuals and are helpful as it reduces the overall cash outlay. If you are a business, Consumer Lending may also allow you to claim a tax reduction for the asset (especially cars) come tax return time. Either way, Consumer Lending can improve cash flow and allow for instant access to the asset without having to cover the whole cost out-front.

Finance Leasing

Finance Leasing works in the way that the lender purchases the equipment/assets and leases it to you for an agreed term and rental. Tax deductions are available for the total rental repayments. At the end of the lease period, the Lender owns the equipment and may choose to sell it in the open market. Most businesses end up acquiring the equipment themselves. Finance Leasing allows you to preserve your working capital whilst allowing you to claim tax back and due to the fixed payments, cash flow is easy to manage.

Asset and equipment finance is a highly desired finance option for individuals and businesses. It allows benefits such as freeing up capital that can be used elsewhere and reduces upfront costs. In addition, it often allows you to avoid depreciation of the asset and eliminates unexpected costs associated with the asset or equipment. With Mintwell, we can assist with all the above options and assist you with choosing what one is best for your circumstances, tailoring the outcome to suit you and your end goals and objectives. If you would like to speak with one of our experts, please get in touch.

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Mintwell Capital Pty Ltd (ABN 13 616 609 548) is an authorised representative, AR 1254638, of AFSL Holdings Australia Pty Ltd (ABN 75 165 392 889) AFSL 460940.
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