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One of the most important parts of some businesses is the equipment you need to be successful. This can be anything from a truck or forklift to IT equipment or agricultural machines. Though all of this equipment is extremely important it is also extremely expensive and most businesses do not have the money to buy this equipment out right. Luckily you can get business equipment financing which can give you several options for ways to pay for this important equipment. Some of these equipment finance options include a chattel mortgage, a commercial hire purchase or a finance lease.
A chattel mortgage is a valid option for business equipment finance. A typical chattel mortgage is done when the borrower gets money for the purchase of property, in this case, for a piece of commercial equipment. The lender will secure the money with an actual mortgage over the chattel. The actual ownership of the chattel will be transferred to the person or entity that has made the purchase and the mortgage will be taken off once the vehicle is paid off. When you use a chattel mortgage you will be able to claim back the GST of the purchase price which can save you a lot of money in the long run.
Another option for equipment financing is to use a commercial hire purchase. When you use this option, as the chattel mortgage above, you will be able to claim back the GST you paid at the time of purchase, a great benefit. A commercial hire purchase is where you will have a contract with the financer. You will agree, through this contract, to pay for your equipment in parts or sometimes in a percentage, over time. You will basically be paying a percentage of the purchase price as a deposit on the equipment. The final outcome is you will be renting or hiring use of this equipment.
The third equipment finance main option you have is a finance lease. This will, in many cases, allow you to have 100% of your lease payments be tax deductable. The process of a finance lease is where you will choose your equipment and the financer will actually buy it. You will have access to and be able to use the equipment during the terms of the lease and will make a series of payments to the financer including interest. At the end of a certain amount of time, you will have the option to return the equipment to the financer or buy the equipment for your own use. You will not own the equipment during the lease agreement.
Those are the main ways to go through the business equipment finance process, but there may be other options as well depending on your company’s circumstances. Only by contacting a qualified finance company will you be able to find out the best option for you in order to get the equipment you need for success. There are many great companies in the Melbourne area to assist you and a great place to start is to do a search online.