We Are Your Commercial Loan Specialists
Whether you are looking for to finance equipment, business loans, debtors, a lease, or any other business finance, we can help.
We help you structure the deal correctly, advise you each step of the way, and help you obtain competitive market rates from a choice of commercial lenders.
There are many different options available within commercial finance, with many different benefits.
Please see below for further information.
We are all about service and will work with you for the life of the loan and way beyond to service your business needs.
As an alternative to leasing or hire purchase, a chattel mortgage or bill of sales arrangement is a fixed interest rate loan with security provided by a mortgage over the relevant equipment i.e. vehicle, boat etc.
This is a particularly favourable solution for those businesses that wish to retain the equipment at the end of the term and account for GST on a cash basis.
A chattel mortgage, unlike a lease or hire purchase agreement, gives you immediate ownership of the asset from the beginning of the loan. The contract or repayments do not attract GST or stamp duty.
Residual / Balloon
You can choose to have a balloon payment as the last payment of your finance agreement, but it can also be the first month’s payment.
This balloon payment is between 10% – 40% of the cost price.
A balloon payment allows for lower monthly payments and leaves you with more working capital to run your business.
You can elect to pay the GST portion of the invoice price from working capital or fund it as part of the loan amount (the loan can be structured so that when the income tax credit is received, from your next BAS lodgement, it is paid off the loan to reduce the debt).
The interest components of all repayments are fully tax deductible, provided goods are used 100% for business purposes.
The depreciation on the goods is also completely tax deductible.
There are different types of leases, but generally leasing is used for financing the purchase of assets like cars, telephones, computers, equipment, machinery etc.
It is a popular form of financing as it saves spending the business’ capital. The borrower doesn’t own the goods and in effect pays ‘rental’ to the financier.
The full lease payment is tax deductible if the equipment is used 100% for business, but the value of the item cannot depreciate over time.
A lease generally requires that a pre-agreed amount (balloon/residual) will be owing at the expiry of the term.
Hire Purchase Agreement
A hire-purchase agreement allows the buyer to hire the goods for a monthly rent.
When a sum equal to the original full price plus interest has been paid in equal instalments, the buyer may then exercise an option to buy the goods at a predetermined price (usually a nominal sum) or return the goods to the owner.
The buyer, who has the use of the goods, is not the legal owner during the term of the hire-purchase contract. Hire purchase is frequently advantageous to consumers because it spreads the cost of an expensive item over an extended period of time.
Business consumers may find the different balance sheet and taxation treatment of hire-purchased goods beneficial to their taxable income.
Please refer to the ATO at: www.ato.gov.au/businesses for further information
If you’re a successful wholesaler, manufacturer or service-based business who sells on credit terms with debtor finance, you can borrow funds using the trade value of your debtors as collateral.
This allows you to gain access to your accounts receivable prior to receiving the funds, maximising your business’ cash flow.
To qualify for debtor finance, you’ll need a minimum amount of annual and your business will need an established credit history.
While this type of loan is harder to get than traditional loans, it may well be worth the effort if your company qualifies for one.
LOW DOC Loans
Most lenders now have a low doc policy for business borrowers –
If you are –
- Asset backed
- Clean credit
- Minimum 2 years ABN
- GST registered
You will qualify for a LOW Doc facility for up to $150k, subject to assessment and the asset being purchased.