Equipment Finance

Tax effective advice for financing your asset purchases

Locking down the right equipment finance for your business is critical to its ongoing success.

With our expert knowledge of tax laws and our wide experience in loans and finance, we can help you explore different ways to finance the purchase of equipment for your business and work out the GST and FBT implications.

We can give you tax effective advice for financing all your asset purchases and have access to a panel of leading lenders from the major banks and financial institutions for highly competitive quotes.

Finance Lease

An agreement whereby the financier owns the goods and you, the lessee, leases these goods from the financier for a predetermined monthly repayment and term. You must show this lease on your Balance Sheet as an asset with a corresponding liability. Finance Lease Agreements must have a residual or a lump sum, which represents the potential sale price of the goods at the end of the lease term.
At the end of the lease term, you have the following options:

• Re-leasing the residual for another term (subject to terms and conditions)
• Offering to buy the asset, usually for the amount of the residual
• Trading the asset on a replacement and paying back the supplier any shortfall or keeping any profit.

In most cases, you will be able to claim the full amount of the rentals as tax deductions, provided the goods are used predominantly to earn assessable income.

Commercial Hire Purchase

An agreement whereby you, the hirer, hires the goods from the financier for a predetermined monthly repayment and term. Upon the last payment of the agreement, you obtain full title and become the outright owner of the equipment.
Depending on business usage, the interest portion of the regular repayments and depreciation can be claimed as a tax deductions.Flexibility of the structure of the Commercial Hire Purchase agreements is an attractive feature. An unlimited amount if deposit can be made by way of cash or trade-in and a choice of either full repayment over the term or a lump sum (balloon) payment at the end of the agreement can reduce the monthly commitment and assist cash flow.

Chattel Mortgage

Similar tax implications to Commercial Hire Purchase. This product is designed to allow businesses using cash based accounting to claim back the full GST payment in their next BAS return.

Lease In Escrow

Used for the importation of equipment from overseas and/or the construction of machinery. A documentary letter of credit is issued for the shipment period and upon arrival in Australia the facility is converted to the agreed lease structure. Generally, no collateral security is required. Fees for this transaction are priced on an individual basis with payment required up front.

Sale & Leaseback

You may have recently purchased a piece of equipment and paid cash to utilize an attractive discount. We can buy this equipment from you at wriiten down value (but often at price you paid) and lease it back to you, effectively replenishing your cash supplies. Purchases must have taken place in the last 6 months and have been from a licensed dealer in the goods.

Operating Lease / Rentals

A pure rental agreement between yourself and the financier for a predetermined term and monthly repayment. Ideal for the acquisition of IT, Office Equipment Motor Vehicles and Heavy Haulage Vehicles which can become quite obsolete over a number of years. At the end of the rental period you have the option of upgrading to the latest model hence saving on obsolescence and increased maintenance costs. In most cases, you will be able to claim the full amount of the rentals as tax deductions, provided the goods are used predominantly to earn assessable income.

Contact the finance experts at Countplus mbt to discuss your vehicle and equipment finance requirements and let us help you take advantage of tax benefits and maximise your cash flow.