An improving landscape for Equipment & Vehicle Finance from Finlease

The start of 2024 has seen several encouraging signs in the Equipment & Vehicle Finance area.

Since the start of the year, we have seen the cost of debt reducing as interest rates have already come off by around .5% and we expect this momentum to steadily continue throughout 2024. 

The competitive environment among financiers is heating up, leading to a wider variety of assets eligible for FAST TRACK finance products. These products, including options like No Financials –  Low Document loans alongside Replacement Policy finance, are making it increasingly appealing to secure funding for both additional and replacement assets. This shift is opening new doors for businesses seeking growth and efficiency through asset finance.

As a result of the above, it has never been easier for companies to obtain very competitive finance from a broad base of other lenders as an alternative to their banks and with little effort as their broker will make the whole process painless, quick and easy.

This year has also seen a change from traditional Chattel Mortgages to Finance Leases for some larger companies where their annual turnover in excess of $10mil and the equipment they buy has an ATO calculated effective life of greater than 10 years. This transition to Finance Leases is simply to facilitate a more tax effective debt structure (within ATO guidelines). 

For those companies with a turnover of less than $10mil, Chattel Mortgage (CHP) is still generally the preferred option especially where the client is using the Simplified Tax System to claim accelerated depreciation levels of 30% Diminishing Value.

Finally, with the increasing propensity for many companies to sell any of their surplus equipment and vehicles ONLINE, we are seeing an increase in the number of used equipment and vehicle purchases as Private Sales which can typically be just as easily financed as new or used items from a dealer & at similar interest rates.

For further information on any of the above, please reach out to your Finlease Broker – Luke Carroll 0488 480 960