For over 20 years, we have acted as broker financing all types of Assets. Our team have backgrounds in accounting, legal and banking so we can handle a diversity of situations.

At the outset, we will make our MCP Credit Guide and Privacy Statement available to you. It outlines the basis of providing advice to you, and other things like how we are remunerated.

To assist, we do need to understand your financial position. For business owners, this includes a Statement of Financial Position and some supporting information for the business.

Asset Finance Options

There are varied options for funding Assets. All generally allow 100% of the purchase price to be funded (secured by the asset itself) with a fixed term.

The comparisons between these structures is demonstrated below:

FINANCE TYPE OWNERSHIP TAX STATUS DEPOSIT? RESIDUAL?
Chattel Mortgage Yes Claim Interest & Depreciation Yes Yes
Commercial Hire Purchase Yes - at end Claim Interest & Depreciation Yes Yes
Finance Lease No Claim Payment as Tax Deduction No Yes
Operating Lease No Claim Payment as Tax Deduction No No

COMPARATIVE BENEFITS

Chattel Mortgage

You take ownership of the asset. The financier takes their interest over it by way of mortgage. Once the contract is completed, the security interest is removed giving the customer clear title to the vehicle.

Potential Benefit – For businesses registered for GST on a cash basis, they may claim back GST in full in their next Activity Statement. Gives certainty of ownership and ability to contribute a deposit.

Commercial Hire Purchase

The financier purchases the asset on behalf of the customer, and then hires it back over an agreed term. After the residual is paid, the customer assumes ownership.

Potential Benefit – Gives some certainty of ownership at end, but generally less tax effective than a Chattel Mortgage option. Not a widespread product option currently.

Finance Lease

The financier retains actual ownership of the asset with an option to purchase at the end of the term.

Potential Benefit – A good option if you update equipment or vehicles on a regular basis. The financier retains ownership of the asset, so you only finance the purchase excluding GST. You may also not want ownership for legal or accounting reasons too.

Operating Lease

This options means that you will not own the asset.  This is commonly referred to as being “Off Balance Sheet” and you can simply return the goods at the end of the term. Generally this structure is delivered at a higher cost.

Potential benefit – An option when you are turning over equipment regularly, need greater flexibility and want one simple repayment.

Finally - Tax

The taxation treatments associated with ownership of equipment can be unique to your personal circumstances. We can support you in getting accounting advice.

For example, this may assess whether the benefits associated with asset ownership of equipment, outweigh any benefits of a full deduction of payments through leasing.

 

Finally - Tax

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