Asset Finance provides Australian businesses with the opportunity to acquire essential equipment without depleting working capital. Whether you're buying new equipment, upgrading existing equipment, or expanding operations, understanding Asset Finance fundamentals helps you make informed decisions for your business needs.
What is Asset Finance?
Asset Finance is a funding solution that allows businesses to purchase or lease equipment, vehicles, and machinery. The financed asset typically serves as collateral for the loan, reducing risk for lenders and potentially securing more favourable terms for borrowers.
This financing method covers diverse business requirements:
• Office equipment including computers, printers, and furniture
• Work vehicles such as trucks, trailers, and delivery vans
• Specialised machinery including excavators, tractors, graders, cranes, and dozers
• Commercial equipment finance for manufacturing and industrial needs
• Factory machinery and production equipment
Types of Asset Finance Options
Chattel Mortgage
A chattel mortgage allows businesses to purchase equipment outright while using the asset as security. You own the equipment from day one and can claim depreciation and interest as tax deductions. This option suits businesses wanting immediate ownership and tax benefits.
Hire Purchase
With Hire Purchase arrangements, you make fixed monthly repayments throughout the life of the lease. Ownership transfers to you after completing all payments. This structure helps manage cashflow with predictable repayment schedules.
Operating Lease
Operating leases provide equipment usage without ownership obligations. At lease end, you can return the equipment, upgrade to newer models, or purchase at residual value. This option suits businesses requiring current technology without long-term commitments.
Benefits of Working with Asset Finance Brokers
Asset Finance Brokers provide access to Asset Finance options from banks and lenders across Australia. Rather than approaching individual lenders, an Asset Finance Broker compares multiple loan options to find suitable solutions for your circumstances.
Key advantages include:
• Access to multiple lenders and finance options
• Professional assessment of your business needs
• Assistance with loan amount calculations and structuring
• Support throughout the streamlined application process
• Ongoing relationship management and service
Factors Affecting Your Asset Finance Application
Interest Rate Considerations
Your interest rate depends on several factors including business credit history, loan amount, asset type, and loan term. Asset Finance Brokers help you understand rate structures and identify options that align with your budget.
Loan Amount and Asset Value
Lenders typically finance up to 100% of asset value, though this varies by asset type and borrower circumstances. Some arrangements may require deposits or trade-ins to reduce the loan amount.
Business Financial Position
Lenders assess your business's ability to service repayments through financial statements, cash flow projections, and trading history. Strong financial performance generally improves approval chances and terms.
The Asset Finance Application Process
Applying for Asset Finance involves several steps that professional brokers can help streamline:
- Initial Assessment: Review your equipment needs and financial position
- Lender Comparison: Evaluate finance options from multiple providers
- Documentation: Gather required financial and business information
- Application Submission: Submit applications to selected lenders
- Approval and Settlement: Complete documentation and arrange equipment delivery
Choosing the Right Asset Finance Solution
Selecting appropriate Asset Finance requires careful consideration of your business circumstances:
• Equipment Type: Different assets may suit different financing structures
• Usage Requirements: Consider how long you need the equipment
• Cash Flow: Evaluate repayment schedules against business income cycles
• Tax Implications: Understand depreciation and interest deduction opportunities
• Future Needs: Consider whether you'll want to upgrade or replace equipment
Why Perth Businesses Choose Professional Asset Finance Services
Perth's diverse economy spans mining, construction, manufacturing, and service industries. Each sector has unique equipment requirements and financing considerations. Asset Finance Brokers understand local market conditions and maintain relationships with lenders familiar with Western Australian business needs.
Professional brokers provide ongoing support beyond initial financing, helping businesses adapt their equipment financing as operations evolve. This relationship-based approach ensures you receive appropriate guidance for current and future Asset Finance requirements.
Working with experienced Asset Finance professionals saves time, provides access to comprehensive market options, and delivers tailored solutions for your specific business circumstances. Their expertise in commercial equipment finance and understanding of various loan options helps you make informed decisions that support business growth and operational efficiency.
Call one of our team or book an appointment at a time that works for you to discuss how Asset Finance can support your business equipment needs.
