As an accountant, you understand the critical balance between business growth and financial stability. When your clients need to acquire new assets, Asset Finance presents a strategic solution that can support their expansion while preserving working capital. Understanding the various finance options available can help you provide valuable guidance to your clients.
Understanding Asset Finance Fundamentals
Asset Finance enables businesses to acquire essential equipment without the immediate cash outlay of a full purchase. This financing method allows companies to spread the cost of assets over time through structured repayment plans. The loan amount can typically cover up to 100% of the asset's value, making it accessible for businesses with varying financial positions.
When applying for Asset Finance, the asset itself serves as collateral for the loan. This security arrangement often results in more favourable interest rate terms compared to unsecured lending options. The streamlined application process means your clients can move quickly when opportunities arise to purchase essential equipment.
Types of Assets Covered
Asset Finance accommodates a broad range of business equipment across various industries:
• Office equipment: Computers, printers, furniture, and communication systems
• Work vehicles: Cars, vans, and utility vehicles for business operations
• Specialised machinery: Industry-specific equipment tailored to business operations
• Heavy machinery: Truck, trailer, excavators, tractor, graders, cranes, and dozers
• Factory machinery: Manufacturing equipment and production line components
Key Finance Structures Available
Chattel Mortgage
This structure allows your client to own the asset immediately while using it as security for the loan. The business claims depreciation and interest as tax deductions, making it attractive for profitable enterprises. Fixed monthly repayments help with budgeting and financial planning.
Ready to get started?
Book a chat with a Mortgage Broker at Laneer Finance Group today.
Hire Purchase
Under this arrangement, the lender owns the asset during the life of the lease, with ownership transferring to your client upon final payment. This option suits businesses that want to preserve capital while accessing necessary equipment.
Commercial Equipment Finance Benefits
Asset Finance offers several advantages that align with sound business practices:
- Cashflow preservation: Instead of depleting cash reserves, businesses maintain liquidity for operational needs
- Tax efficiency: Depending on the structure chosen, clients may claim depreciation and interest as deductions
- Flexible terms: Loan options can be tailored to match the asset's productive life and the business's cashflow patterns
- Equipment upgrading: Regular refinancing allows businesses to stay current with technological advances
Accessing Finance Options
At Laneer Finance Group, we provide access to Asset Finance options from banks and lenders across Australia. This broad network ensures your clients receive appropriate terms that align with their business needs. Our team works with various lenders to secure competitive arrangements for different asset types and business circumstances.
The application process involves assessing the client's financial position, the asset's value, and the proposed repayment structure. Documentation typically includes financial statements, asset quotations, and business registration details.
Managing Client Expectations
When discussing Asset Finance with clients, consider these factors:
• The asset's expected productive life versus the loan term
• How repayments align with the business's seasonal cashflow patterns
• The total cost of finance compared to alternative funding methods
• Exit strategies if business circumstances change
Whether your clients are buying new equipment or upgrading existing equipment, Asset Finance can provide a structured approach to asset acquisition. The key lies in matching the right finance structure to each client's specific circumstances and objectives.
Understanding these finance options positions you to offer informed guidance when clients face equipment acquisition decisions. By partnering with experienced finance professionals, you can ensure your clients access appropriate funding solutions that support their business growth objectives while maintaining financial stability.
For assistance with your clients' Asset Finance needs, call one of our team or book an appointment at a time that works for you.
