“The Investment Allowances were certainly great news, particularly for small business. Ands while the legislation was passed last year, for many businesses, 2010 will be the year they actually take delivery of their equipment, install it and put it to work.
It’s fairly easy to understand what vehicles and equipment are eligible, and what relevant deadlines must be met, yet less has been spoken about the finance structure you’ll need. Bear in mind that if you fund your purchase with a Lease or Commercial Hire Purchase, you could have your Investment Allowance claim disallowed, so be wary of a dealer or supplier who is recommending such a solution.
We at Finlease have advised our clients that a ‘Chattel Mortgage’ is the preferred structure and have even gone one step further to make sure you can claim the relevant Investment Allowance. We’re recommending that the finance is structured as an ‘Equitable’ Chattel Mortgage, which operates only by way of a charge over the asset so that you remain the legal owner of the vehicle or equipment you are purchasing. Your Finlease broker will be happy to discuss how that works in practice, it’s really quite straight forward.
At Finlease, we have the correct ‘Equitable Chattel Mortgage’ documentation which has been amended to ensure it complies with the ATO guidelines.
Best thing to do is let us handle the complex issues regarding the finance structure, so that you can focus on running your business and sourcing the equipment you need to get things operating more efficiently.”
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