When you need new equipment to help your business grow, is it better to buy it outright or finance it? Here are some things to consider when thinking about asset finance.
Whether you’re a tradie and need to buy a new ute, or a grocer and need a new forklift, these tools of trade are vital to the growth and success of your business. They also account for a significant capital outlay, if purchasing outright. So you might want to consider asset financing as an option.
Secured asset finance can be used to acquire assets such as motor vehicles, equipment, machinery and even renewable energy solutions. Finance is secured by the asset, this usually enables the lender to provide more favourable interest rates and finance terms when compared to unsecured forms of financing.
You can apply for asset finance, no matter how small your business is. It can be a smart way to get what you need or keep your business moving, without tying up precious capital.
“If I own a delivery company and I need another van, financing can make sense because I don't need to use my available capital to buy it outright,” says Lucas Tarnawski, Head of Product, Asset Finance at Pepper Money.
“I could be using that capital for things like employing people or advertising, rather than sinking it into a depreciating asset.”
Not only can asset finance reduce capital outlay, but spreading the cost of the asset over time through financing could place less financial stress on your business as finance terms can work in line with the projected cash flow of your business and what is affordable.
“By choosing asset finance, you could be giving yourself the ability to generate income to pay for the asset over the agreed finance term.”
This scheme has been extended to June 30, 2022. Be sure to check the ATO website and speak to your accountant to see if you’re eligible.
This article provides you with factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. Neither Pepper nor its related bodies, nor their directors, employees or agents accept any responsibility for loss or liability which may arise from accessing or reliance on any of the information contained in this article. For information about whether a Pepper loan may be suitable for you, call Pepper on 13 73 77 or speak to an accredited Pepper Money broker.
All applications are subject to the credit provider’s credit assessment and loan eligibility criteria. Terms, conditions, fees and charges apply. Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser.
©Pepper Money Limited ABN 55 094 317 665; AFSL 286655; Australian Credit Licence 286655 (“Pepper”). All rights reserved. Pepper is the servicer of home loans provided by Pepper Finance Corporation Limited ABN 51 094 317 647. Pepper Asset Finance Pty Limited ACN 165 183 317 Australian Credit Licence 458899 is the credit provider for asset finance loans.