Buying a Vehicle with Equipment Finance

Having a reliable vehicle or vehicles is an important aspect of running a successful business. Using a finance broker when buying your next vehicle offers many benefits:

  • Competitive rates – we have over 25 equipment finance lenders to choose from, you can get market leading rates every time;
  • Streamlined Process – up to 75% of the finance deals we do for business vehicles are done without providing financials;
  • Flexibility from your main bank – business vehicle finance is only secured by the vehicle you buy. There is no need to be at the mercy of your main bank. We are able to source the best deal without disrupting your main banking relationship.
  • Quick Turnaround – The whole process is done for you with majority of deals approved in 24-48 hours

What you need to know about Business Vehicle Finance

Business Vehicle Finance falls into the category of Equipment Finance. There are are 2 main types of equipment finance, both with some differences including the terms of facility and treatment of tax.

Chattel Mortgage (90-95% of all vehicle purchases)

  • You own the vehicle from day of purchase
  • Your accountant will claim depreciation and interest
  • Facility terms of 12 – 60 months are available
  • Balloon payments available – a balloon payment allows you to nominate a lump sum amount to be owing at the end of the facility. This conserves cashflow and works well if you are planning to trade in the vehicle at the end of the facility.

Learn more about a Chattel Mortgage here

Finance Lease

  • The finance company owns the vehicle and leases it back to you.
  • Your accountant will claim the full monthly lease payment
  • Ownership is transferred to you after the final payment
  • Facility terms of 12-60 months
  • A residual amount is available – similar to the balloon payment about – improves you monthly cashflow by lowering the monthly payment.

Learn more about a Finance Lease here

General Finance Requirements

Using finance for a vehicle is often a streamlined process and can be completed from start to finish in as little as 3 days if required.

There are two types of applications: Streamlined or Full Documentation.

Streamlined Applications

Streamlined applications reduce the amount of information required for your application. They are designed to speed up the whole process. If you meet the following you will more than likely qualify:

  • Been in business for more than 2 years (GST registered)
  • You are purchasing a vehicle from a dealer
  • The vehicle is 4 years old or less
  • One of the owners or directors owns property in their name (security is not taken over the property) – used in place of needing financial information of your business
  • Good credit history

Full Documentation Applications

Full documentation will be required where the Streamlined application guidelines are not met. The full documentation is useful where:

  • buying a vehicle over $100,000
  • private sales
  • vehicles older than 4 years
  • don’t own property or less than 2 years in business

The big difference to the Streamlined option is you will need to provide the last 2 years personal and business/company tax returns and tax portals with your application.