What is Asset Finance?
Asset Finance is a funding solution that allows your business to acquire equipment, vehicles, or machinery without paying the full purchase price upfront. Instead of using your working capital, you can access Asset Finance options from banks and lenders across Australia to spread the cost over time with fixed monthly repayments.
Whether you're buying new equipment or upgrading existing equipment, Asset Finance provides several pathways to get the assets your business needs while helping you manage cashflow more effectively.
Types of Assets You Can Finance
Asset Finance covers a broad range of business equipment and vehicles. Common assets that Sunshine Coast businesses finance include:
• Work vehicles - Cars, utes, and commercial vehicles
• Heavy machinery - Truck, trailer, excavators, tractor, graders, cranes, dozers
• Office equipment - Computers, printers, and technology systems
• Specialised machinery - Industry-specific equipment and factory machinery
• Commercial equipment - Tools and machinery specific to your trade or industry
The flexibility of commercial equipment finance means almost any business asset can be considered as collateral for financing.
Main Asset Finance Options
Chattel Mortgage
With a chattel mortgage, your business owns the asset from day one, using it as security for the loan. You'll make regular repayments over the agreed term, and the asset serves as collateral. This option often provides tax benefits, as you can claim depreciation and interest as business expenses.
Ready to get started?
Book a chat with a Asset Finance Broker at Treadgold Finance today.
Hire Purchase
Hire Purchase allows you to use the asset immediately while making regular payments. At the end of the life of the lease, you'll own the asset outright. This structure helps with budgeting as you'll know exactly what your repayments will be throughout the term.
Operating Lease
An operating lease lets you use the vehicle or equipment for a set period without owning it. This option can be particularly suitable for assets that may become obsolete quickly or when you prefer to upgrade regularly.
Key Factors That Affect Your Finance
Interest Rate
The interest rate on your Asset Finance will depend on several factors including your business's financial position, credit history, and the type of asset being financed. Rates can be fixed or variable, each offering different advantages depending on your business needs.
Loan Amount
Lenders will assess how much they're willing to finance based on the asset's value, your business's capacity to repay, and the deposit you can provide. Most Asset Finance agreements cover 80-100% of the asset's value.
Repayment Terms
The repayment period typically ranges from one to seven years, depending on the asset type and your business requirements. Longer terms mean lower monthly repayments but higher total interest costs.
The Application Process
Applying for Asset Finance involves several steps, but our team at Treadgold Finance works to make this process as smooth as possible for Sunshine Coast businesses.
You'll need to provide:
• Recent financial statements or tax returns
• Details about the asset you want to finance
• Information about your business and its trading history
• Bank statements showing your business's cash flow
Many lenders now offer a streamlined application process, which can reduce the time from application to approval.
Benefits of Using Asset Finance
Asset Finance offers several advantages for businesses:
- Preserve Cash Flow - Keep your working capital available for day-to-day operations
- Tax Benefits - Potential deductions for interest and depreciation
- Predictable Budgeting - Fixed monthly repayments help with financial planning
- Acquire Assets Sooner - Get the equipment you need without waiting to save the full purchase price
- Flexible Terms - Various loan options and repayment structures to suit different business needs
Choosing the Right Finance Option
With numerous finance options available, selecting the right structure depends on your specific business needs. Consider factors like:
• Whether you want to own the asset immediately
• Your preference for tax treatment
• How long you plan to keep the asset
• Your cash flow requirements
• Whether you want the option to upgrade regularly
At Treadgold Finance, we help Sunshine Coast businesses compare different finance options to find the most suitable solution. Whether you need truck loans for transport operations or financing for specialised machinery, we can connect you with appropriate lenders.
Choosing Asset Finance is about finding the right balance between acquiring the assets your business needs and maintaining healthy cash flow. With the right finance structure, you can invest in growth while keeping your business finances on solid ground.
Call one of our team or book an appointment at a time that works for you to discuss your Asset Finance requirements.
