Aussie has some info here that may assist your understanding with finance solutions – have a read and give us a call.
Finance Options Available.
Need Finance is your source for short-term and long-term finance solutions – we offer flexible lease, finance and rental options to suit your needs. Need Finance have a proud history of being one of Australia’s leading finance option provider’s.
Need Finance offer finance solutions for commercial goods such as forklifts, bobcats, tractors, computers, servers, catering equipment, warehouse equipment, office furniture, office
equipment, and phone systems and so on.
Operating Lease/Rental
An Operating Lease/Rental is a type of lease in which the financier retains ownership of the leased equipment. Under an operating lease there is no predetermined ’residual’
value to pay as ownership does not pass automatically to the customer at the end of the term.
Operating Leases/Rentals are not listed on the company’s balance sheet. Being ‘off balance sheet’ is considered a major advantage over finance leases. By not having to list the
Operating Lease/Rental on the balance sheet the company’s debt to equity ratios are not adversely affected. This means that the Bank will be more inclined to provide funds when needed for other worthwhile projects.
For high technology equipment, which can become obsolete within a couple of years, Need Finance can tailor a term that will enable you to hand back the old equipment
and take the new asset within a set time frame – a clean and easy way to keep your business in front of the competition.
Option 1 – Rent only.
For many people, a straight-forward rental agreement is often the most cost-effective way to acquire equipment. The contract term can be structured from 24 – 60 months. At
the end of the term, you have three options –
- Hand back the equipment and upgrade or
- Continue to rent the equipment or
- Offer to purchase the equipment at fair market
value
Benefits
- Security of fixed payments and interest rates
- Preserves working capital – funds can be invested in other parts of the business
- Tax efficient – lease payments are generally 100% tax deductible
Option 2 – Rent to own.
Essentially, you
pay a rental fee for an agreed term 24 – 60 months. Once the rental agreement ends, you have a final $1.10 payment (Inc GST) to make and the contract is finalised. There is no further obligation – the goods are yours.
Benefits
- Security of fixed payments and interest rates
- Preserves working capital – funds can be invested in other parts of the business
- Tax efficient – lease payments are generally 100% tax deductible
Fast Finance Made Easy!
Lease
A lease represents a way for a company or an individual to obtain new or near new equipment for business purposes without extending their budget. Having a deferred payment set
or a ‘Residual Value’ at the end of the repayment term enables this to happen. The Residual Value is geared to represent the future value of the goods.
For tax and accounting purposes, the financier is treated as the owner – i.e. ‘off-balance sheet financing’. Interest rates are fixed for the term, which is negotiable within a range of 12 to 60 months. Residuals are set by the Australian Taxation Office and vary depending on the projected life span of the goods.
Benefits
- Preserves working capital
- Fixed repayments and
interest rates for the term of the lease - Tax efficient – lease
payments are generally 100% tax deductible
Business Vehicle Loan/Asset Purchase
A Business Vehicle Loan is a flexible and tax effective means of financing a forklift. Under a Business Vehicle Loan your business owns the forklift and the financier takes a mortgage/bill of sale over it.
You can choose to structure your loan over a 12 – 60 month term and incorporate a final balloon payment to match your monthly payments with your cash flow requirements. Interest is calculated daily and extra repayments can reduce the loan period and interest payable.
Benefits
- No GST on repayments
- The equipment is an asset of your business
- Payments can be structured to suit your business requirements.
- Interest can be offset against taxable income
- Depreciation allowances may be claimed.
Business Equipment Loan/Term Purchase
A Term Purchase represents the ideal choice if a company seeks to own their equipment at the end of the repayment term. That is, the ownership of the equipment passes to
the customer upon payment of the final instalment.
The arrangement can be structured either to be fully amortised over the term, or payments can be set by structuring a “balloon” payment as a final instalment. It is structured to preserve business capital whilst paying for the equipment from generated income.
For tax and accounting purposes, the operator is treated as the owner – i.e. ‘on-balance sheet financing’. Interest rates are fixed for the term, which is negotiable within a range of 12 to 60 months. This option best suits those who aim to eventually own their equipment.
Benefits
- No GST on repayments
- Unit is shown as an asset on the balance sheet.
- Payments can be structured to suit your business requirements
- Interest can be offset against taxable income.
- Depreciation allowances may be claimed
WE are here to help!
Simply speak to your Need Finance representative who can provide you with further information and assist you in establishing the finance package that suits you best.
Need Finance recommend that customers consult with their Accountant or Taxation Professional to determine which product best suits the needs of your business and speak with Aussie.
Need Finance offer finance solutions for commercial goods such as forklifts, bobcats, tractors, computers, servers, catering equipment, warehouse equipment, office furniture, office
equipment, and phone systems and so on.