Australian Finance Enterprise is able to assist in the purchase of all types of equipment used across a spectrum of industries. This would include cars and trucks, computers and office equipment, tractors and agricultural implements, earthmoving and mining equipment and much more.

There are several ways for a business to finance plant and equipment. The most common ways are by taking out a business loan, a lease or hire purchase. To determine which financing option is most suitable for your business, it is important to understand the differences between these options.

Product Differences Ownership of goods

• A loan allows you to purchase equipment and take ownership over the goods immediately.
• On the other hand, if you lease or take out hire purchase finance, the goods will in fact be purchased by the financier, which in turn rents or hires the equipment back to your business over a specified period.
• With a lease, the financier is the owner of the goods. With a hire purchase, you will become the owner of the goods upon making the final payment. This difference in ownership has significant taxation implications as explained below.

Taxation Considerations

Your choice of financing method will affect the level of taxation advantages available to you based on the different treatment of depreciation and repayments.

• Depreciation (This may be a tax deductible expense provided the goods are used for business purposes.)
• With a loan, you may be able to claim depreciation as a tax deduction by being the owner of the goods.
• With a hire purchase, your business is deemed to be the ?beneficial? owner of the goods upon making the final payment and accordingly depreciation may be a deductible expense.
• If you lease a piece of equipment, the asset does not belong to you. Hence depreciation is not an allowable tax deduction. Instead, the financier that owns the equipment will claim the depreciation against its income.

Repayments

• By financing equipment either through a loan or hire purchase, you may be able to claim the interest charges (but not the principal amount) as a tax deduction.
• With a lease, the total lease rental may be a tax deductible expense.

We specialise in commercial finance and can arrange leasing and hire purchase finance packages for all industry sectors:

• Manufacturing & Industrial Plant
• Road Transport Vehicles
• Office Equipment & Fittings
• Agricultural Machinery
• Hospitality Industry Equipment
• Medical & Dental Equipment
• Aircraft
• Boats
• Motor Vehicles
• Earthmoving and Mining Equipment

M.I.S Funding

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