Equipment Finance: for cars, trucks, boats and all types of machinery

Whether for private or business use, there are many reasons to consider equipment finance. For some it’s a matter of cash flow. For others, it’s tax deductibility or simply being able to use your available cash for more beneficial investment. Once a decision has been made to finance equipment, there are various structures you can use, all which have different objectives and benefits. Frontline’s team of specialists consider your future objectives to make sure that the structure you use today won’t have an adverse effect on what you need tomorrow. This process can prove to be critical. Frontline Financial Solutions will provide you with this critical information and follow through with the appropriate finance. Dealing with a single institution leaves you with limited options. Frontline has access to all of the market leading products and institutions, so you have every advantage. Please speak to one of our equipment finance specialists about your situation and options. Summarised below are some of the options and their benefits.

HIRE PURCHASE

For companies and professionals to buy goods such as motor vehicles, trucks, boats,  machinery or industrial equipment. Under a hire purchase agreement, the finance company owns the goods and “hires” them to you. Once the final payment has been made, ownership of the goods passes to you.  The goods are used as security, so your other assets are not tied up.

Deposit: Hire purchases can be arranged with or without a deposit. This will often depend upon your circumstances.     Tax Deductions: Interest and depreciation are tax deductible provided that the equipment is used for incoming producing purposes or incurred as a result of carrying on a business.     Repayments: Rates are fixed for the life of the term of the contract, so your repayments won’t change. Balloon repayments can also help to reduce repayments throughout the term. Seasonal repayments can also be organized for some businesses.

LEASING

For companies and professionals to buy business goods such as motor vehicles, trucks, machinery or industrial equipment. Under a leasing agreement, the finance company purchases the goods and maintains ownership of them, then leases the goods to you. At the end of the term, the goods are returned to the finance company, or you can make arrangements for ownership. The goods are used as security, so your other assets are not tied up. Leases and operating leases are often also used for equipment that will become obsolete, such as computers and phone systems. At the end of the term, an upgrade is often necessary. Instead of tying up your cash assets in obsolete equipment, it makes better sense to lease it and return it at the end of the term. A new lease can be used for the new equipment.

Deposit: No deposit is required     Tax Deductions: The repayments are tax deductible provided that the equipment is used for incoming producing purposes or incurred as a result of carrying on a business.     Fixed Interst and Repayments: Rates are fixed for the life of the term of the contract, so your repayments won’t change. Balloon repayments can also help to reduce repayments throughout the term. Seasonal repayments can also be organized for some businesses.

CHATTEL MORTGAGE

For companies and professionals to buy business goods such as motor vehicles, trucks, machinery or industrial equipment. Under a chattel mortgage, you own the goods and the finance company takes security, a mortgage, over them. You maintain ownership of the goods at all times. Once the contract ends, the finance company removes the mortgage from the goods.

Deposit: Chattel mortgages can be arranged with or without a deposit. This will often depend upon your circumstances.     Tax Deductions: Interest and depreciation are tax deductible provided that the equipment is used for incoming producing purposes or incurred as a result of carrying on a business. In some circumstances, the GST on the purchase can be claimed in a lump sum on your next BAS.     Fixed Interst and Repayments: Rates are fixed for the life of the term of the contract, so your repayments won’t change. Balloon repayments can also help to reduce repayments throughout the term. Seasonal repayments can also be organized for some businesses.

NOVATED LEASES

Novated leases are used for employees who have the option of including a car as part of their salary package. The employee chooses the car they want and the finance company leases it to them. The employer makes the repayments on behalf of the employee. The lease remains in the name of the employee as does the registration of the vehicle. The employee is responsible for the maintenance of the vehicle. Should the employee leave the company, the ownership remains with the employee and the employee is responsible for the repayments.

Deposit: No deposit is required in many cases.     Fixed Interst and Repayments: Rates are fixed for the term of the contract, so your repayments won’t change. Balloon repayments can also help to reduce repayments throughout the term.