Do you know the different Asset Finance options available?

When you're running a business in Melbourne, there comes a time when you need to invest in new equipment or upgrade what you already have. Whether it's buying new equipment for your office, work vehicles for your team, or specialised machinery for your operations, the costs can quickly add up. That's where Asset Finance comes into play.

Asset Finance is a funding solution that allows businesses to acquire the equipment they need without paying the full purchase price upfront. Instead of draining your working capital, you can spread the cost over time with fixed monthly repayments that help you manage cashflow more effectively.

What Can You Finance Through Asset Finance?

The beauty of Asset Finance lies in its flexibility. You can use it to fund a wide range of business assets, including:

• Office equipment like computers, printers, and furniture
• Work vehicles such as cars, vans, and utes
• Specialised machinery for construction and farming
• Heavy equipment including truck, trailer, excavators, tractor, graders, cranes, and dozers
• Factory machinery and manufacturing equipment
• Medical and professional equipment

When applying for Asset Finance, lenders typically consider the equipment itself as collateral, which can make approval more straightforward than unsecured business loans.

Understanding Your Finance Options

Chattel Mortgage

A chattel mortgage is one of the most popular commercial equipment finance options for Australian businesses. With this arrangement, you own the asset from day one while the lender holds a mortgage over it. This option often provides tax benefits, as you can claim depreciation and interest as business expenses. The interest rate is typically fixed, making it easier to budget for repayments.

Hire Purchase

With Hire Purchase agreements, you make regular payments throughout the life of the lease, and at the end of the term, ownership of the asset transfers to your business. This option works well when you want to eventually own the equipment but prefer lower initial outlay. The loan amount is spread across the entire term, which can help with cashflow management.

How the Application Process Works

The application process for Asset Finance has become more streamlined in recent years. When you're ready to start, you'll typically need to provide:

1. Details about your business and financial position
2. Information about the equipment you want to finance
3. Quotes from suppliers
4. Recent financial statements or tax returns

At Premier Path Finance, we can access Asset Finance options from banks and lenders across Australia, which means we can compare loan options to find something that suits your specific business needs.

Factors That Influence Your Application

Several factors can impact your Asset Finance application:

• Credit History: Your business and personal credit history will influence both approval and interest rate
• Equipment Type: The type of asset you're financing affects the loan terms
• Loan Amount: Larger amounts may require more documentation
• Business Performance: Lenders want to see that your business can support the repayments

Making the Right Choice for Your Business

Choosing between different finance options depends on your specific circumstances. Consider factors like:

• How long you plan to use the equipment
• Your current cashflow situation
• Tax implications for your business
• Whether you want to own the asset immediately or at the end of the term

Upgrading existing equipment can improve productivity and efficiency, but it's important to choose a financing structure that aligns with your business goals and financial capacity.

Getting Professional Support

Working with experienced mortgage brokers can make a significant difference when exploring Asset Finance options. We understand the lending criteria of various banks and lenders, and can help match you with the most suitable vehicle or equipment finance solution.

Every business has unique requirements, and what works for one company may not be the right fit for another. That's why it's valuable to discuss your specific situation with professionals who can explain the different loan options available and help you understand which approach might work for your circumstances.

If you're considering Asset Finance for your Melbourne business, whether it's for buying new equipment, upgrading existing equipment, or expanding your operations, professional guidance can help you make informed decisions about your financing options.

Call one of our team or book an appointment at a time that works for you to discuss how Asset Finance might support your business goals.