Equipment Finance

Equipment Finance
Equipment Finance/Leasing

Whatever the equipment, whatever your business, CommunityBE$T has the equipment finance or leasing solution to suit. Whether you are running a home office, managing an SME enterprise or large company we can assist with your financing needs.

What type of equipment can be financed?

Motor Vehicles, Trucks & Buses

Boats & Aircraft

Earthmoving Equipment, Heavy Machinery

Farm Machinery

Computers & Office Equipment

Retail & Office Fit Out (Fixtures & Fittings)

Manufacturing Plant

Hospitality Equipment

Industrial Equipment

Medical Equipment

Salon Equipment

Benefits of this type of finance

100% finance. Conserves capital that may be better utilised in other areas of your business.

Repayments structured to suit cash flow

Possible tax advantages

Fixed Rate (Known Cost!)

Novated Leases may improve employee salary package

Benefits of this type of finance

100% finance. Conserves capital that may be better utilised in other areas of your business.

Repayments structured to suit cash flow

Possible tax advantages

Fixed Rate (Known Cost!)

Novated Leases may improve employee salary package

Leasing is a well known method of improving cashflow management and preserving your cash for your core business or for projects offering better returns on capital. What is not as well known sometimes is how much better off your business may be in real dollar terms by leasing.

Lease V’s Buy – At the end of the day it is simply about cashflow.

Submit an online request for a FREE Lease V’s Buy analysis.

The analysis assists you in assessing your project funding options to help achieve an optimal capital utilisation.

Overview of Products
Commercial Hire Purchase (CHP)

A very flexible product sometimes referred to as a Lease Purchase. Under CHP the equipment is owned by the lender and hired to the user for a set term.

100% funding or trade-in/cash equity can be included to reduce the amount financed.

A Balloon Payment can be structured into the facility, similar to a Residual Value that applies to a lease. Ownership automatically passes to the user upon final payment.

Tax Purposes – Hirer claims interest component of repayments paid and depreciation on
the equipment. No tax guidelines regarding end value (balloon payment).End value can be a NIL amount. GST claimed in line with monthly payments.

Chattel Mortgage

In most respects identical to a Commercial Hire Purchase product.

Key difference lies in the ownership of the goods with the user being the owner. This distinction allows ‘taxpayers on the cash method’, to obtain a full input tax credit for any GST paid in relation to the purchase of the goods.

Tax Purposes – Owner claims interest component of repayments paid and depreciation on the asset. No tax guidelines regarding end value (balloon payment) which can be written down to a NIL amount if desired. GST claimed in line with purchase.

Rental

Similar to a lease but the equipment is returned at the end of the term with no residual value. Usage generally associated with Office Equipment i.e. Computers, faxes etc.

Finance Lease

The equipment is owned by the lender ‘lessor’ and leased to the user ‘lessee’ for a set repayment amount over a set term with a Residual Value² being set at the outset. A lease is generally not a flexible product and the user can have no equity in the goods (no deposit/trade-in), 100% funding.

Residual Value² (end value) must be set within Australian Taxation Office guidelines depending on the ‘effective life’ of the goods and the lessee guarantees payment of the residual value of the asset, to the lessor at the end of the term of the lease.

Tax Purposes – Repayments are fully tax deductible to the lessee. GST claimed in line with repayments.

“Depreciation” in general terms, is the Tax Office allowance for the decrease in value of certain equipment owned and used in the course of business. The allowance varies reflecting what effective life the equipment has.

Residual Value is the estimate, made at the outset, of the likely value of the equipment at the end of the lease term

Operating Lease

A lease where the lender (not the user), is responsible for the residual value.

Equipment is off balance sheet which may have some advantages for a company.

Whilst the client has no guarantee of ownership, generally the lender at the end of the term will offer the equipment for sale at the Residual Value.

Novated Lease

A flexible motor vehicle lease, where the employer makes the lease payments out of the employee’s pre-tax income but where the lease agreement is between the lender and the employee. If the employee leaves the employer all obligations of the lease payments revert back to the employee. Tax advantages for both employer and employee may apply.

Fleet Lease

Generally used where a company or business has a fleet of vehicles,

Can be a standard lease where the borrower is responsible for the residual or an operating lease. Vehicle maintenance may also be included.

Lease Back

Where the owner of the equipment wishes to get back the outlay/purchase price of the equipment, such as when the goods have been imported (Taxation issues?).

Can be used for transferring ownership of the asset (refer Operating Lease) or for improving Cash Flow.

Master Lease Agreement

If you have numerous ongoing equipment finance needs, it may be beneficial to set up a Master Lease Agreement with a pre-approved limit to cover all equipment.

Documentation is reduced and the purchasing process is streamlined with pre-approval (Similar to a Line of Credit).

For more information or to arrange a Pre-Approved Credit Limit, phone the Finance Centre on (02) 4633 8700 or email us and we will contact you.

*Finance/Loan products subject to application and approval. Terms, conditions and eligibility criteria apply. Fees and charges may be payable. On all occasions you will be asked to show that you have the capacity to repay the loan from your existing income

Disclaimer
CommunityBE$T does not provide tax and accounting advice. Product descriptions are for information purposes only. Please seek independent advice to ensure you have the best finance solution for your personal or business needs.