Transport Equipment Finance – Changing the Game
Technology is transforming business faster than ever before, and the transport industry is no different. At Savvy, we know to remain competitive and keep up with the pace of modern-day commerce, it’s essential you have up-to-date machines and vehicles – and that demands access to efficient, cost-effective funding that’s flexible enough to meet the specific needs of individual business models. With faster delivery times and increasingly sophisticated vehicles and equipment come higher customer expectations and stiffer competition – and tailored transport equipment finance can give your business the edge.
Find a Faster Route to Transport Equipment Finance
All businesses need to update equipment, tools, and machinery now and then – some more frequently than others. When that happens, the key to effective finance is making the right choices – and that presents two main requirements. Companies and owner-drivers need options, and they need fixed, clear cut costs so they can forecast for their future. At Savvy, we help thousands of Australia’s busiest transport operators find convenient, competitive finance solutions because we partner with more lenders and provide fast-track access to a broader range of specialist, industry-specific financial products.
Why So Many Transport Companies Choose Savvy
Compare more transport equipment finance options, more lenders, and find more competitive interest rates
Transport Equipment Finance Products – The Explainer
Before you make your next move, find out which asset finance option matches the way you trade with Savvy’s explainer
Transport Equipment Finance Products – What to Consider
There are three primary asset finance products, offered by a range of Savvy’s specialist lender partners, and all with their own tax, GST, and cost benefits.
- Chattel Mortgages enable immediate recovery of GST, interest on repayments is tax-deductible, and businesses can use a deposit or adjust the residual amount to match repayments to projected revenue.
- Finance Leases provide the full use of equipment during the term with an option to buy when the agreement ends. Repayments are fully tax-deductible and based on the GST-free value of vehicles or other assets.
- Operating Leases are akin to a long-term rental. Payments are fully tax-deductible, and businesses get the option to bundle all operating costs and admin.
When you’re looking to finance equipment, it’s important to consider all the implications. It’s an excellent idea to consult your financial officer or accountant and then seek the advice of a finance consultant, to scour the entire lender marketplace. At Savvy, we help hundreds of transport companies each month to find the optimal and most cost-efficient equipment finance solution. We deal with a diverse selection of some of Australia’s best lenders, so products are more industry-relevant, competitive, and flexible.
Transport Equipment Finance Facilities: The Finance Lease
Finance Leases are based on terms that range between one and five years. The lender owns the asset until the end of the agreement, and a residual payment becomes due when the term ends. Finance lease residuals get based on ATO tables for depreciation, so they’re set according to the length of the lease. When that finishes, you can purchase the vehicle or equipment by paying the residual, refinance the amount and extend the lease, or sell the asset and start a new agreement.
- Lease payments are fully tax-deductible
- Cost of the lease gets based on the ex-GST value of the truck or equipment
Transport Equipment Finance Facilities: The Operating Lease
An Operating Lease works somewhat like a fully maintained long-term rental agreement. The lender purchases the equipment and then rents
it to you for a fixed cost and term, which can run over anything from one to five years. Many transport businesses use operating leases to manage everything from single vehicles right up to larger fleets, removing the need for costly administration. Operating leases work well for equipment that depreciates quickly or needs to be upgraded frequently.
End-of-lease options are flexible. You can either hand the asset back, make an offer to buy the asset or extend the lease.
- The cost of insurance, servicing, registration, and fuel can be bundled into regular payments
- Zero ownership or residual risks
- The whole of the regular lease payments are tax-deductible
- Cost of the lease gets based on the GST-free value of the vehicle or equipment
Transport Equipment Finance Facilities: The Chattel Mortgage
Chattel Mortgage finance gets commonly used in the transport industry, where assets with relatively long service lives are used – such as trucks and trailers. Also known as an asset loan, a chattel mortgage is secured finance and has the advantage of a low interest rate. Your business owns the vehicle or equipment from the start of the term, and the lender registers a mortgage over it until the loan gets fully repaid, at which point you gain a clear title
- Terms range between 12 months and seven years
- Use an adjustable residual payment to tailor repayments to cash flow
- Option to use a deposit or trade-in
- Interest on repayments is tax-deductible
- Claim back the purchase price GST when you next file a BAS
- No GST on repayments or the residual