FINANCE, INVESTMENTS, BUDGETS & CASH FLOW
Finance Products
Finance Products:
Maintaining a competitive advantage in your business often means keeping up with technology. But acquiring new plant & equipment or simply replacing older, outdated models can be an expensive exercise- draining your capital base and placing an even greater burden on your cash flow.
There are various finance options available to assist your business grow and prosper.
Courtesy - Bruce Smith, Westlink Finance
There are various finance options available to assist your business grow and prosper.
The full amount can be financed or you may make a deposit to reduce payments. Terms are 1-5 years with or without a balloon (or residual) at the end of the term. When the final payment is made you become the outright owner of the goods.
If you are on a “cash” basis for GST, the amount of GST in the purchase can be claimed back on a monthly basis over the term- “accrual” basis you can claim GST at the outset.
The tax claim is interest and depreciation, which is usually higher in the first few years of the loan, and therefore greater tax benefit in the initial period.
This product has come back to the fore with the introduction of GST. It has the same features as Commercial Hire Purchase but is a straight loan to the purchaser with the financier obtaining security over the goods by a Bill of Sale.
Importantly, it allows the business on a “cash” basis for GST to claim the GST in full up front, in the current BAS period. This can then be structured back into the loan as a nominated payment to help reduce the payments.
The full amount of the purchase is financed over a term of 1-5 years with a residual value at the end of the term. The repayments are normally tax deductible and give you an even spread of the tax benefit.
The GST on the purchase is claimed by the financier and the net amount is financed.
GST applies to each repayment however this can be claimed back.
Finance Options:
Finance Lease:
Commercial Hire Purchase - Asset Purchase:
Chattel Mortgage/Loan Contract:
Novated Lease:
Leases on motor vehicles can be novated.
This facility allows an employer to offer an employee a leased vehicle as part of their renumeration package. The employer is normally able to claim the lease rental payments as a tax deduction.
The lease and its obligations is taken out by the employee and the employer only agrees to pay the lease rentals as they fall due. If the employee leaves for any reason, the liability for rental payments by the employer ceases.
With each of these options, repayments can be structured to meet cash flow requirements. Interest rates and repayments are fixed and you can plan your cash flow with confidence.
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