FAQs

The mortgage in an asset acquisition funding product refers to credit offered for the goods.

No. The interest charged on repayments is a tax deduction but the balance is not. A deduction can be claimed on this type of funding via asset depreciation.

No. Registering an enterprise for GST is not a criteria for eligibility for commercial credit applications.

No. The treatment of GST with this form of credit facility is that the total GST on the car purchase is claimable immediately after settlement on the appropriate BAS. As all the GST pertaining to the purchase has been claimed, no GST is included in the repayments.

All vehicle makes and models including vans for use in an enterprise may suit a secured credit product. The suitability of a credit facility depends on accounting aspects of the enterprise, not specifics of the vehicle.

Interest rates vary with the different types of commercial car credit. Secured format credit and CHP have the lowest rate with Leasing slightly higher.

Yes. All types of commercial enterprises may apply for commercial credit. A range of financials and documents are required for the application form. Where the operator has not been trading long enough to acquire this information, they may look for low doc and no doc credit which is available from specialised lenders and through brokers.

Yes. All makes and models of wheeled and yellow goods used in the construction sector may be funded with a secured credit facility.

A balloon amount is an amount of the total credit, usually represented as a percentage which is due for full payment at the end of the term. The amount approved for a balloon is subject to individual lender guidelines.

Second hand and new cars may be acquired with a secured commercial credit product. The condition of a second-hand vehicle is assessed by lenders and the interest rates may be different for new and second hand models.

Leasing and a secured credit option differ in suitability to either the cash or the accruals method of accounting. With a secured option the operator takes ownership and the asset is listed in their balance sheet. With Leasing the goods remain under the ownership of the lending and as such this is considered and off-balance sheet option. The most suitable option is the facility that best meets the objectives of the enterprise.

Credit calculators are provided to generate estimates only based on values entered by the user. Lender charges and fees are not accounted for. The credit rating of the user is not assessed with a credit calculator. An offer made by a lender can be different from the calculator result.

Operators may select from a secured credit facility or Leasing, Commercial Hire Purchase or Rent-to-Own to fund asset acquisitions. Features of each product should be considered in regard to the accounting practices and objectives of the operation.

If a balloon is refinanced when due, at the end of the term, the funding application is assessed and priced based on the assets at that time, the interest rates at that time and the credit position of the enterprise at that time. The rate which applied to the initial credit application would not apply.

Lenders accept assets as suitable security for secured credit facilities. Some operators may not need further collateral. Whether or not further collateral is requested is dependent on the application and individual lender guidelines.