Financing Vehicles and Equipment

Whether you require a photocopier or a semi-trailer, you’ll need to carefully consider how to finance your investment.

Asset Finance describes the family of products designed specifically for vehicle and equipment acquisitions, with leasing and hire purchase as the primary finance options. Contracts are normally written on a fixed interest rate basis, with payments being predetermined and fixed for the term - putting you in a position to plan your cash flow more accurately.

What are your options?

Hire Purchase
A Hire Purchase arrangement is an agreement to purchase equipment subject to payment terms. During the term of the Hire Purchase Agreement, the financier owns the vehicle or equipment, with ownership automatically transferring to you when you make the final payment.

Finance Lease
A Finance Lease provides 100 per cent financing (no deposit necessary) for the acquisition of equipment for use in your business. It is essentially a rental agreement where the financier owns the equipment, which you then lease for an agreed term and rental amount. You indemnify the financier for the residual value at the end of the lease term.

Operating Lease
An Operating Lease is an agreement to rent equipment for use in your business for a fixed period. It can be an efficient and cost effective financing strategy if you are continually upgrading your vehicles and equipment, or if you are only interested in renting and not owning your asset. At the end of the lease period, you simply return the vehicle or equipment to the financier, subject to return conditions, without obligation for the residual value.

Novated Lease
Novated Leasing is a flexible and convenient way of acquiring a vehicle for both employers and employees.

The employee can lease the motor vehicle of their choice, while the employer pays the rentals and other running costs (if applicable) directly from the employee's salary. And if the employee leaves, the novation agreement automatically ceases. Responsibility for the lease reverts to the employee and the employer no longer has any obligations.

Equipment Loan
An Equipment Loan is a loan agreement in which you borrow funds to purchase equipment. You provide security for the loan by way of a mortgage to the lender (Commonwealth Bank) over the equipment financed.

Fleet Leasing and Management
If you operate more than five vehicles (either in the form of a tool of trade fleet, or employee salary packaging arrangements), you may like to consider our fleet management services.

What are the benefits of Asset Finance?

Capital and credit conservation
Working capital and lines of credit are preserved for use in your business.

Flexibility
Payments can be structured to suit your particular cash flow pattern.

Simplicity
Standard procedures are used to simplify approval and documentation, which means a quick turnaround between the initial inquiry and funding.

What’s best for your business?
That depends on the current state of your business and your future plans. You may need to revisit your Business Plan to determine the cash flow implications and the impact on the business’ profitability.

You should also consult with your accountant and/or solicitor to discuss the tax and accounting implications arising from different vehicle and equipment financing options.

Important information about advice
As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances. Employers and employees are encouraged to seek professional advice on all aspects of novated leasing before proceeding. Applications are subject to the Bank’s normal credit approval. Fees and charges are payable.