There are special loans available for the purchase of new equipment where the loan can be secured against the equipment purchased, rather than against bricks and mortar.
Depending on the equipment, the loans can be for 100% of the equipment purchased.
Leasing/Hire Purchase/Chattel Mortgage
Leasing can be a way for businesses to purchase equipment, plant and motor vehicles without tying up capital.
Repayments can be structured to suit cash-flow and may be paid monthly, quarterly, half yearly or annually and are normally paid in advance.
In most cases the equipment or vehicle will be sufficient security.
There are leases that can be like a line of credit where additional items can be purchased and added to the lease.
There is different tax treatment for different types of finance so it is important to seek advice from your accountant before making your choice.
One lender offers a rent-to own options for vehicles and business equipment. It offers all the main benefits of hiring at a third to half the cost and is available to used assets as well as new.
• No or minimal capital outlay
• 100% tax deductible
• Off balance sheet which means your ability to borrow money is unaffected
• Quick and easy applications
• Short 12 month term that can be extended
Unlike most lenders brand new businesses, as long as they have an ABN, can apply.
Purchasing your Premises
This type of financing differs significantly to traditional residential lending. It is very important that an application is structured and presented correctly and includes all the supporting notes and documentation.
Some of the major differences for commercial property loans are:
- LVR’s (Loan to Value Ratio) are lower 65-75%
- Specialized properties (i.e. Service Stations/Hotels will generally have an even lower LVR
- Interest rates are higher
- Interest only periods generally are shorter
- More reliance on the cash-flow and lease terms
Something that is often overlooked in the commercial loan area is that some lenders have what is referred to as “set and forget” facilities as opposed to the traditional “annual review” type of finance. Generally these will have a 5 year interest only period followed by 15 year Principle and Interest.
To maximize the return on your investment it is important to choose the lender best suited to your requirements.