There are lots of factors to be considered when thinking about financing for business purposes, including:
- What are my growth plans and staff needs?
- Will the vehicle help me generate new business and income?
- Is the vehicle important to the image that I wish to portray to my clients?
- Is convenience of having a new, reliable, low maintenance vehicle an important consideration?
- What Tax benefits result under different financing options?
- Do I need to preserve my valuable cash resources?
- What types of business finance options are available?
There are three main types of financial agreements available for business vehicles:
- Asset Purchase (known as 'Commercial Hire Purchase' or just 'Hire Purchase', in some States)
- Commercial Loan
- Commercial Lease
All are effective means of vehicle financing for businesses, where the vehicle is primarily intended for business use, and for businesses who are seeking finance that enables effective tax planning and manageable ongoing costs. Upfront deposits, trade-ins and/or residual (final) payments at the end of the contract can reduce monthly repayments.
With an asset purchase the customer intends to purchase the vehicle at the conclusion of the finance contract whilst under a lease the finance company takes possession at the conclusion of the contract.
With a commercial loan, the vehicle is owned by the customer at the commencement of the agreement.
What are the advantages in financing a vehicle?
Retention of valuable working capital, to enable you to grow and develop your business. Normally up to 100% of the vehicle cost is financed, so your cash resources are not depleted.
Taxation advantages can also be a major attraction to financing your vehicle. In general, provided the vehicle is used for producing assessable income, the cost of financing can be deductable from your taxable income. For more detailed and specific information you should contact your accountant or financial adviser.
Budgeting and cash flow forecasting is made much easier as you know in advance your commitments each month. The interest rate and payments remain fixed for the term of the agreement.
Your payment options can be tailored to suit your specific needs. We can satisfy your needs and cash flow with a range of different payment frequencies: monthly, quarterly, half yearly, annually or even a structured payment series that is unique to your own specific business needs.
