With cashflow in the 1st quarter of the new year typically feeling the effects of the quieter billing months of December and January, access to sufficient cashflow reserves can be a little constrained.
Here’s two quick fix solutions to boost your cash reserves:
It may also be beneficial to fund your insurance premiums. To learn more about Insurance Premium Funding, have a read of our blog: finlease.com.au/blog/insurance-premium-funding/
Ready to discuss cashflow solutions? Get in touch with our team 1800 358 658
In today’s market, equipment finance should be done without any cross security to other assets including bricks & mortar. With so many banks still grouping all securities under “cross collateralization” clauses, business owners may wish to look elsewhere for their equipment & vehicle finance which can be done on a “stand alone” basis, whilst keeping their bricks and mortar security for more appropriate requirements, such as increased overdraft facilities, property funding and other cash generating requirements.
In a world of increased competition, business owners may be pleasantly surprised by the finance offerings available in the market as an alternative to their bank and without the chains & shackles.
This 90 second video explains it all in laymen terms.
Looking for alternative equipment and vehicle finance options that meet your business requirements? Our expert equipment finance specialist, Michael Ryan, can assist you with your needs 0417 279 891 or send him an email to [email protected]
Onpack says the investment in the Hinterkopf 240.2 will “transform the flexibility and turnaround times” for can decoration.
The Hinterkopf will print 240 cans a minute, with nine printing units including CMYK, white, orange, violet, green and varnish. It enables 360° printing with no overlap.
When Onpack needed market finance options available to meet its ambitious investment, it worked closely with the Finlease team to determine and decide on the best solution for its needs.
Michael Nankervis, managing director of Onpack, said, “Finlease made the process simple, and was able to present multiple compelling funding options, which allowed Onpack to remain focused on commissioning the new equipment and building the new canning division.”
Independent Australian-owned Finlease is one of the major finance providers to the printing industry, with clients across the trade, from the biggest names including the IVE Group, Rawson, Centrum and Ego, and including a long list of smaller printing companies and local franchise print shops.
The 100-employee Finlease was established 35 years ago, and now has 13 staff working in a dedicated technology division which handles the print industry. Well known industry figure Michael Gillis, who had 27 years with Fuji Xerox and seven years with HP Indigo, recently joined the company.
It is now looking to ramp up its service to the print and packaging industry, particularly as drupa approaches. Adam Fittler, national technology manager at Finlease, said, “With the drupa trade show only eight months away, and the dramatic expansion in technology options set to continue to grow, its set to be a busy few years ahead for the printing industry. With Finlease’s support and passion for the industry, we will be getting behind the print businesses of Australia between now and drupa, to help printers get the best finance options they can in place.”
With the window for the 100% depreciation tax incentive having now been reduced to $20,000 assets from July 1st, 2023, which is the right structure for financing equipment, chattel mortgage or finance lease?
The answer depends on the size of your company.
Chattel Mortgage remains the favoured choice.
Especially if you’ve opted into the Simplified Tax System, assets acquired post-July 1, 2023, can be added to a Depreciation Pool.
Under this structure, relevant assets can be depreciated at 30% diminishing value (15% for the initial year as the asset has not been held for the full 12 months).
Learn More>> 🔗 ATO’s Overview on Simplified Tax for Small Business
Assets purchased after July 1, 2023, will adhere to the usual depreciation allowances under the Effective Life classification by the ATO.
For instance, if an asset is determined by the ATO to have a 10-year lifespan:
Annual depreciation will be:
– 10% (Prime Cost) or
– 20% (Diminishing Value)
Learn More >> 🔗 ATO on Effective Life of an Asset 🔗 Prime vs. Diminishing Value
As an alternative for those larger organisations, we expect to see a return to some assets being financed under a Finance Lease where the actual lease payment is claimed as the deduction, provided the lease structure (term and residual) fits ATO guidelines.
To illustrate: An excavator with an effective lifespan of 10 years might only offer:
– A mere 50% depreciation over a 5-year span.
– However, a finance lease over 5 years (with a 25% residual) permits deductions equal to 75% of the asset’s value
There’s no doubt that the 2024 financial year and beyond is a very different landscape to the Covid induced tax incentives of the past few years. Companies should speak with their broker and accountants to ensure they structure their future equipment debt in the most appropriate tax effective manner.
📞 Seeking More Insights? As your Finlease broker, they are here to assist.
With over 30 years of experience financing both vehicles and equipment for a diverse range of clients in many industries, Finlease has the expertise to debunk some common misconceptions about equipment financing.
If you’re a solid company with good trading results, the interest rates available at present ranges from 7.5-8 per cent, depending on the asset and term. If you’re paying more than this, it may be a case of what your provider would like to charge you, as opposed to what is actually available in the market.
Although interest rates have essentially doubled in the past six months, the effect on the actual monthly payment for equipment and vehicle finance has been much less than for home loans.
We’ve seen circumstances where the interest rate quoted is not actually reflected in the monthly payment. The problem here is that unless you have a finance calculator to work it out, you’re none the wiser. There are plenty of online calculators where you can check – including one on the Finlease website.
Take heed – unless you actually check, there’s really no way of knowing, so it’s worth spending five minutes online to ensure you’re getting what you have been told.
There are plenty of competitive financiers who will finance used machines at good interest rates. Often, there are significant savings to be made by going down this track.
Yes, there are extra steps in the finance process, including an inspection of the asset, but these are easily arranged. Care needs to be taken to ensure that the asset being purchased is not currently either under finance or under a GSA (fixed and floating charge). This is easily checked through a company search on the vendor.
That may be the case with your bank, but there’s plenty of other competitive financiers out there who will finance vehicles and equipment at good rates without the need for financials.
Where assets are being upgraded, there are ‘no financials’ policies that can finance replacement equipment up to $500,000.
We’ve heard plenty of times people saying: “I use my bank because brokers are more expensive”. This is simply not the case and easily tested by obtaining finance quotes so you can compare the monthly finance costs. Larger broking firms place large volumes to market ($900 million per annum in our case), driving substantial discounts.
Any decent broker should be looking for a 20-year relationship and will act in a manner to ensure that. Brokers should have plenty of feedback from clients on independent review websites, such as Product Review and Google.
Money is a raw material, no different to fuel. It must be accessed in the easiest, cheapest manner, backed by good service. In a world where margins are tight, it’s more about the leftover than the turnover, so it’s essential to keep all costs under control – including finance costs.
A good equipment finance broker will gladly help give you clarity around the options available to your business.
At Finlease, we pride ourselves on taking the BS out of equipment finance to ensure you talk to an expert who has your best interests front of mind.
For more information, contact Michael Ryan – [email protected]
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