Understanding Asset Finance for Commercial Fitouts
When you're planning a commercial fitout in Brunswick, whether it's transforming a retail space on Sydney Road or updating your office on Lygon Street, funding the project can feel like a significant hurdle. The upfront costs for office equipment, specialised machinery, and factory machinery can quickly add up, putting pressure on your business finances.
That's where asset finance comes in. Instead of paying the full loan amount upfront and depleting your reserves, asset finance allows you to spread the cost over time with fixed monthly repayments. This approach helps you preserve working capital while still getting access to the latest equipment you need to operate.
What Can You Finance in a Commercial Fitout?
Asset finance isn't just for one type of purchase. At Premier Path Finance, we help Brunswick businesses access Asset Finance options from banks and lenders across Australia for various equipment needs:
- Office equipment including desks, chairs, computer systems, and technology equipment finance
- Hospitality equipment finance for cafes, restaurants, and bars
- Medical equipment finance for clinics and healthcare facilities
- Work vehicles and commercial vehicle finance
- Specialised machinery for manufacturing or production spaces
- Point-of-sale systems and customer management technology
How Asset Finance Works for Your Business
The concept behind asset finance is straightforward. Rather than buying new equipment outright, you're essentially using the equipment itself as collateral. This is known as asset based lending, and it typically offers more favourable terms than unsecured business loans.
You'll work with a broker to determine the loan amount you need, then choose from several finance options that suit your business needs. The lender purchases the equipment, and you make regular payments over an agreed term. Depending on your chosen structure, you might own the equipment at the end, or you might have the option to upgrade.
Types of Asset Finance Structures
Chattel Mortgage
A chattel mortgage is popular with businesses because of its tax benefits. You own the equipment from day one, claim the GST upfront, and can claim depreciation throughout the loan term. This structure works well for established businesses with healthy cash flow looking to purchase equipment they'll use long-term.
Commercial Hire Purchase
With a Hire Purchase arrangement, the lender owns the equipment until you've made your final payment. There's often the option to include a balloon payment at the end, which reduces your fixed monthly repayments throughout the term. This can be helpful when managing cashflow during the early stages after a fitout.
Equipment Leasing
You have two main leasing options:
- Finance Lease: You use the equipment for the life of the lease and typically have the option to purchase it at the end for a predetermined amount
- Operating Lease: Better suited for equipment with a short upgrade cycle, where you return the equipment at the end of the term
Ready to get started?
Book a chat with a Finance & Mortgage Broker at Premier Path Finance today.
The Financial Advantages
Preserve Capital for Business Growth
One of the biggest advantages of using asset finance for your commercial fitout is that you preserve capital. Rather than spending $50,000 or $100,000 upfront on equipment and furniture, you can keep that money in your business for operational expenses, marketing, or unexpected opportunities.
Tax Benefits and Depreciation
Depending on your chosen structure, you may be eligible for tax deductions on interest payments, claim depreciation on the equipment, and benefit from favourable GST treatment. These tax benefits can significantly reduce the effective cost of financing. Always consult with your accountant about your specific situation.
Predictable Budgeting
Fixed monthly repayments make budgeting much more straightforward. You know exactly what you'll pay each month, which helps with financial planning and managing cashflow. There are no surprises, and you can factor these payments into your operating costs from day one.
Alternative Financing Routes
Beyond traditional asset finance, Brunswick businesses have several other options:
Vendor Finance and Dealer Finance
Some equipment suppliers offer vendor finance or dealer finance directly. While convenient, it's worth comparing these offers with what independent lenders provide through a broker. You might find better interest rate options or more flexible terms elsewhere.
Fleet Finance
If your commercial fitout involves multiple work vehicles - perhaps you're setting up a tradie hub or delivery service - fleet finance allows you to fund several commercial vehicle purchases under one facility. This can include everything from vans to truck, trailer combinations.
Industry-Specific Considerations
Different industries have different equipment needs:
Hospitality
Restaurants and cafes need commercial kitchens, refrigeration, coffee machines, and dining furniture. Hospitality equipment finance typically recognises the specific demands of this sector.
Construction and Trades
For builders and contractors, construction equipment finance covers excavators, tractor, graders, cranes, dozers, and other heavy machinery needed for your operations.
Medical Practices
Clinics and healthcare providers require specialised medical equipment. Medical equipment finance takes into account the specific compliance and depreciation characteristics of healthcare technology.
Professional Services
For accountants, lawyers, and consultants, upgrading existing equipment or buying new equipment might mean computers, servers, office furniture, and communication systems. Loans for professional services can be structured to accommodate your practice's billing cycles.
Working with Premier Path Finance in Brunswick
As a local mortgage broker in Brunswick, we understand the unique characteristics of doing business in this vibrant area. We work with businesses throughout Brunswick, from the established commercial zones to the emerging spaces near CERES and along Merri Creek.
We'll help you access Asset Finance options from banks and lenders across Australia, comparing interest rate options, loan structures, and repayment terms to find what works for your specific situation. Whether you're opening your first location or expanding an existing operation, we'll work through the machinery purchase or business equipment funding process with you.
Our experience with commercial loans and asset finance means we can guide you through the various finance options available, explain the GST treatment implications, and help structure a solution that supports your business growth objectives.
Setting up or renovating a commercial space is an exciting time for any business owner. With the right asset finance structure in place, you can complete your fitout while maintaining the financial flexibility your business needs to thrive. Call one of our team or book an appointment at a time that works for you.
