I'm Jason Birks, a Brisbane mortgage broker. I spent over ten years lending at Westpac and NAB before starting Birks Financial Group, and I compare more than 60 lenders. I arrange finance for cars, utes, trucks, machinery, medical and dental equipment, IT and fit-outs.
The main types of asset finance
- Chattel mortgage. Your business owns the asset from day one and the lender takes security over it. It's the most common choice for vehicles and equipment.
- Finance lease. The lender owns the asset and leases it to your business, with an option to buy it at the end.
- Hire purchase. The lender owns the asset until the final payment, then ownership passes to you.
- Novated lease. For employees: your employer pays the lease from your pre-tax salary as part of a salary packaging arrangement.
The tax treatment, including GST and depreciation, differs between them. Your accountant can tell you which suits your business, and I'll find the lender.
Balloon payments
A balloon (or residual) is a lump sum due at the end of the term. It lowers your regular repayments, but you'll need to pay it, refinance it or sell the asset when the term ends. I'll show you repayments with and without one.
What lenders look at
- How long your ABN has been registered, and your GST registration
- Your business's trading history and financials, or BAS and bank statements for low doc options
- The asset itself: its type, age and resale value
- Your credit history and any other business debts
Questions people ask
Can I get equipment finance with a new ABN?
Some lenders will, especially with a deposit, property owned or a strong credit history. Others want at least one to two years of trading.
Do I need financials for asset finance?
Not always. Many lenders offer low doc options for established businesses based on your ABN, BAS or bank statements.
Can I finance a used vehicle or equipment?
Yes, though lenders often set age limits on the asset, which can affect the term.
Is a chattel mortgage tax deductible?
Interest and depreciation can often be claimed by the business, and GST-registered businesses may be able to claim the GST. Check with your accountant.
