Business Finance
See below services available
Chattel Mortgages
Chattel mortgage, or CM, is the term for a type of loan contract. Under a chattel mortgage, the purchaser borrows funds for the purchase of equipment. It is a commercial finance product where a financier lends the money to buy equipment and the customer makes regular repayments based on a 1 to 7-year term. Payments are weekly, fortnightly, monthly or structured.
The business takes ownership of the equipment but the financier has a “PPSR” registered / mortgage over the equipment until the loan is fully paid, that may also include any balloon payment. Businesses can choose whether or not to have a balloon in order to reduce repayment amounts or pay off the whole amount over the agreed term.
GST may apply to the purchase price and a business that is GST registered can claim an input tax credit for the GST in the purchase price noted on the tax invoice (if applicable) in their next Business Activity Statement (BAS).
For more information, contact us today.
Rent-To-Own or Operating Lease
An operating lease or rent-to-own option is simply a rental agreement. Technically you are borrowing the equipment from the lender. You can use the equipment for the agreed fixed term and pay monthly or weekly repayments. The benefits of an operating lease or rent-to-own option is it can appear to be an off-balance sheet entry. It will look like you have no loan, just a rental. Payments can be 100% tax deductible (if for business purposes) and you can claim the GST input out of the payments. Another benefit is there is no depreciation so you will always be able to claim 100%. At the end of the term, the lender may offer you to purchase the equipment, with some lenders this is as low as $1 or one or two extra payments.
Business loan
A business loan can help purchase equipment that secured lenders do not want to approve. Business loan funds are paid off over a set term, normally between 3 and 24 months short-term or 3 to 15 years long-term. Repayments are usually daily, weekly, monthly or structured. Business loans can be secured or unsecured and rates will vary depending on multiple factors.
Invoice/Debtor finance
Invoice or debtor financing is an option for businesses to borrow money against invoice amounts due on 30 to 120-day cycles. Invoice or debtor finance basically improves cash flow for the business, it pays employees and suppliers, and can be reinvested in growth earlier than expected.
Selecting the right invoice/debtor finance!
Available are two debtor finance solutions. These provide similar benefits but are designed for different size companies.
- Invoice factoring: best for smaller companies. This is based on individual invoices. It provides funding and collections services.
- Invoice discounting: this is generally for larger companies. This option processes invoices in batches. Companies perform their own credit and collections.
Lenders generally lend up to 80% of the amount invoiced.
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