FAQs

Machinery and equipment used in a business enterprise can be financed with Leasing, Chattel Mortgage, Commercial Hire Purchase or Rent-to-Own credit facilities.

Interest rates on asset finance vary with the different credit facilities, with individual lenders, and will depend on the credit profile and financial position of the applicant. Rates advertised by lenders are generally for new machines and for business operators with a good credit rating.

Start-up businesses generally do not have all the financial information needed for the application form. They may contact brokers to access no doc loans.

To apply for commercial financing, businesses must have an ABN, ID and provide financial documentation on the business. The documentation includes annual accounts, income tax returns, BAS returns, asset and liability schedules, profit and loss statements, turnover, etc.

Tax deductions are available on all types of commercial credit. Chattel Mortgage and CHP have tax deductions when the machine is depreciated. Leasing and Rent-to-Own have tax deductible repayments.

Where multiple machines are required to be financed in the one loan, businesses will need to negotiate with lenders or through a broker for a financing package. The approval and outcome will be subject to individual lender guidelines.

Both new and second-hand business assets can be financed.

A balloon payment is the percentage of the loan total which is due for finalising after the last repayment is made. Including a balloon in a loan may reduce monthly repayments.

In choosing the most suitable loan type, business owners need to check suitability with their accounting method, balance sheet and tax strategy and general objectives. Consulting with an accountant is advised.

Business owners can use an online calculator to obtain loan estimates without requesting a quote or applying for finance.