Asset and equipment finance
The ute, the van, the coffee machine, the excavator, the equipment that earns the income shouldn't drain the working capital that runs the business. Asset finance funds the gear against the gear itself, keeps cash in the business, and, done thoughtfully, leaves your home-loan position undamaged for the day you need it.
How business asset finance works
The common structure is a chattel mortgage: the business owns the asset from day one, the financier holds security over it, and the loan repays over a term matched to the asset's working life, commonly three to seven years. GST-registered businesses generally claim the GST on the purchase price at the next BAS, and interest and depreciation are typically deductible for business use, the specifics being your accountant's territory. A balloon (residual) can lower monthly repayments by leaving a lump at the end of the term: useful for cash flow, dangerous when it's set larger than the asset's value at that date will be.
What financiers assess
The asset first, age, type and resale strength set the terms, which is why new vehicles finance more easily than ten-year-old machinery. Then the business: trading history, financials or bank statements, and the ABN's age. Established businesses with clean statements move fast, often with minimal documentation at smaller amounts; newer ABNs and first-year operators have options too, priced for the shorter track record.
The home-loan connection most people miss
Every asset repayment sits in your debt-to-income position when you next apply for a home loan, a thoughtlessly structured ute loan can quietly cost tens of thousands in borrowing power, and a balloon due the same year as a planned property purchase is a self-inflicted collision. Because we work both sides, asset finance here is structured with the property plans in view: term, balloon and timing chosen so the business gets its equipment and the household keeps its capacity. That's the practical difference between a car-yard finance desk and a broker who knows your whole position.
When not to finance the asset
Honesty clause: paying cash beats financing when the cash is genuinely idle, the asset is small, and the deduction picture doesn't change the answer. Financing wins when the equipment earns more than it costs, when working capital has better uses, or when the GST and tax timing helps the business. The decision is arithmetic, and we're happy when the arithmetic says "don't borrow".
Asset finance questions
What can be financed?
Vehicles, utes and vans are the bread and butter; beyond them, trade tools, machinery, kitchen and medical equipment, IT hardware and most income-producing gear with a resale market. The stronger and more standard the asset's secondhand value, the better the terms, highly specialised or rapidly obsolete equipment finances on tighter conditions.
Do I need full financials to apply?
Not always. For established ABNs at moderate amounts, many financiers run low-doc processes from bank statements and a clean repayment record. Larger amounts, younger businesses and unusual assets bring fuller assessment. The documentation level is itself a matter of financier selection, part of what gets matched.
Is a balloon payment a good idea?
It's a cash-flow tool with a due date. Set below the asset's likely value at term-end, it's a sensible way to keep repayments matched to earnings, with the asset's sale or refinance covering the residual. Set optimistically high, as car-yard finance often does, it leaves you owing more than the vehicle is worth at exactly the moment you wanted to replace it. We size balloons from resale evidence, not from what makes the weekly figure look pretty.
Will asset finance hurt my home loan application?
Any repayment reduces capacity, the question is by how much and for how long. A short term ending before your purchase window, or a structure inside the business entity rather than personal names where appropriate, can materially soften the impact. This is exactly why the asset conversation and the property conversation belong with someone who can see both.
Can I finance a private car this way?
Chattel mortgages and their tax treatment are for business use, a car used privately is consumer lending under different rules and protections. Mixed use is apportioned, and the honest percentage matters at tax time. Tell us the real usage and we'll point the file at the right kind of finance; the wrong label helps nobody.
Related guides
General information only, not credit, tax or financial advice. GST, deduction and depreciation treatment depend on your circumstances, confirm with your accountant. Business-purpose finance generally sits outside consumer credit protections; all finance is subject to assessment and approval.
Fund the gear. Keep the capacity.
Twenty minutes with Charles: the asset priced across financiers, the balloon sized from evidence, and the structure that protects your next property move.
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