Regardless of your business, you undoubtedly need finance to get required equipment. Be it office equipment, industrial machinery, or earth moving equipment, and anything in between, equipment finance is the best way to make them your own.

The traditional method of getting a loan for purchasing/renting equipment involves many legal activities that you have to fulfill in an accurate manner. If you miss out on any of the details or fail to submit requisite documents, your request would be denied. Here you can consider other methods to obtain equipment finance. Some of them are outlined below.

Operating Lease / Rental

It is a contract that allows for the use of an asset, but does not provide rights of ownership of the same. Primarily, an operating lease is not capitalized; it is accounted for a rental expense, which is as known as “off balance sheet financing”. Ownership rests with the lessor, and lessee can use the asset. An operating lease is a rental that offers depreciation benefits accruing for the lessor.

Finance Lease

Generally, a finance lease refers to an agreement that covers most of the working lifespan of a piece of equipment. The lease is based on the lessee guaranteeing the residual value of the leased piece of equipment at the end of its lease term. In this case, the ownership for that leased asset rests with the lessee with the value shown on his balance sheet, deducting depreciation.

Commercial Hire Purchase

You can also opt for commercial hire purchase. In this finance option, ownership of the assets remains with the lender, but lessee can purchase the same with a balloon payment at the end of the finance term. The asset appears on the lessee’s balance sheet without depreciation.

Novated Leases

Novated lease refers to a lease option that covers an employee who leases a piece of equipment, then sub-leases it to their employer who pays the lease rentals. But this option is available for motor vehicles only.

Chattel Mortgage

The Chattel Mortage is similar to hire purchase in many ways, what make it different are GST benefits. This can allow the entire GST proportion to be claimed in the first BAS period after purchase. Further, it can be customised as per the requirement.

Revolving Credit Facility

This facility offers a no-obligation revolving credit line that can be re-negotiated. Primarily, the revolving credit line caters to the needs of a customer over a time-period of 6 to 12 months. Further, you do not have to submit multiple applications.

There are many financial institutes offering these six methods to obtain Equipment Finance in Sydney. You are suggested to approach a reputed one that can help you with all your financial needs in an efficient manner.