Quick & Reliable Asset Finance Brokers

As the name suggests, commercial asset finance is business funding that helps you acquire assets without paying for them upfront. This can be for assets like machinery, vehicles, hospitality equipment, office equipment, farming equipment, and anything else your business needs to succeed.

The finance company (i.e. the lender) purchases the asset on your behalf and you repay the amount with interest in regular installments over the agreed-upon period (typically 1-7 years). Depending on the type of asset finance, once you’ve finished paying the regular installments you will own the asset.

Australian businesses finance their assets primarily because it preserves working capital (cash) within the company while still allowing them to obtain an asset they can use to run and grow the business.

This will depend on whether you’re seeking a personal loan or a business loan. When it comes to a business loan you can finance most assets. Generally speaking, it needs to be an asset that falls under fair “business use”. In most cases, this isn’t an issue, but it’s worth knowing that it’s at the discretion of the lender to approve or reject your application.

In addition, most lenders have stringent policies about the types of assets they’ll finance based on resale value. These are usually categorised as primary, secondary, or tertiary (in some cases category A, B, or C).

• Primary assets: These are assets with the highest resale value and are the easiest to sell. These usually include cars, trucks, trailers, excavators, heavy machinery, and other earth-moving equipment. These assets carry the most attractive rates and terms.
• Secondary assets: These typically include medical equipment, food, and manufacturing equipment. They have a resale value but are not as easy to sell as a car. These assets have slightly less attractive rates and terms since they have less value.
• Tertiary assets: These assets have little to no value in the marketplace and are not easy to sell. They can include things like a 25-year-old trailer or a POS system. Tertiary assets carry much higher interest rates and less favorable terms since they are a major risk for the lender to finance.

The classification of an individual asset will depend on the lender, the age of the asset, its use, value, and demand within the marketplace. If you’re interested in learning how your asset will be treated feel free to submit an enquiry and one of our asset finance brokers will contact you.

Yes, most Australian businesses are eligible for commercial finance provided they have an active ABN. Each lender will have a minimum criteria. The Asset Finance Brokers at Stacked Finance can help you get the asset loan you need.

When choosing an asset finance broker in Australia, you’ll need to be aware of some essentials.

Firstly, all brokers should be FBAA or MFAA-accredited brokers. Secondly, they should also have the relevant qualifications and industry experience.

On top of this, a good broker should:

• Have close relationships with multiple lenders, not just their preferred lenders (we have 60+ to choose from)
• Take the time to understand your business, goals, and equipment requirements
• Be upfront about all rates, fees, processes, and charges
• Know the ins and outs of different finance structures (e.g. chattel mortgage vs commercial lease)
• Work with your financial situation to ensure you actually get approved
• Understand the tax implications for your business of each loan structure
• Fights to get you the best deal possible and conditional approval ASAP
• Understand the current ATO position on tax deductions and other related initiatives (if not then proactively seek the right tax advice for you)

Most importantly, they should speak your language – if the broker can’t explain how the loan works without using fancy jargon, keep looking.

Full documentation: These loans need all the usual paperwork – tax returns, financials, bank statements, and proof of income to show you can make the repayments. They may also require contracts to prove you have work lined up to support the repayments of the asset you’re acquiring.

Low documentation: These loans are suitable for businesses that can’t provide all their business documentation. Instead, they’ll typically need something simple like BAS statements, bank statements, or an accountant’s letter. It’s great for businesses that need something quick but have some supporting documentation on hand.

No documentation: This is one of the fastest ways to get a loan approved for your asset since it requires almost zero documentation. It will rely heavily on the director and the business’s credit score, comparable credit, and basic traits of the business.

Most businesses that need an asset quickly will opt for a low doc or no doc loan since it’s much faster. However, they come with a higher interest rate and less favorable terms since there’s a bit more risk for the lender. Full doc loans are suitable for businesses obtaining multiple assets or higher value assets (e.g. 6 x 2 Axle Semi Tipping Trailers) where a sharper rate and better terms will have a material impact on cash flow.

In terms of asset finance products, there are generally four main ones you’ll want to consider.

Chattel mortgage: This is one of the most common types of asset finance arrangement. Businesses own the asset from the start of the loan term but the lender holds a mortgage over the asset as security. It is very similar to a mortgage for residential property but applied to business assets. The reason it is so popular is that the asset is owned by the business which means it is on their balance sheet and GST, depreciation, and interest payments are tax-deductible.

Commercial hire purchase: A commercial hire purchase, sometimes called “rent to own”, is exactly what the name suggests. It’s a type of finance arrangement where the business hires the asset from the lender and pays a recurring fee to do so. The lender owns the asset initially but at the end of the term, the business will become the owner. With a commercial hire purchase loan, a business can claim GST, interest, and depreciation.

Finance lease: These arrangements are less common than a chattel mortgage or commercial hire purchase but are still an effective way to obtain an asset. The business rents the asset from the lender but they never own it. All lease payments are tax-deductible as operating expenses. In most cases, there is a residual payment at the end and the business has the option to purchase the asset.

Operating lease: Similar to a finance lease, a business will hire the asset from the finance company. However, an operating lease includes additional services like maintenance in the repayments. You simply return the asset at the end of the term. Payments are also considered a tax-deductible operating expense.

When it comes to choosing the right option for your business it usually depends on factors like your immediate needs, your business goals, asset use, tax strategy, and cash flow.

This is why it’s best to work with your asset finance broker to determine which asset finance solutions will suit your business. Not only can you get the best possible outcome with your asset but there’s an opportunity to offset your tax liabilities.

As a business, working with an asset finance broker has many benefits beyond securing the asset you need. In the same way, a mortgage broker can help you get a home loan approved a commercial finance broker can get an asset loan approved.

However, a good commercial finance broker will also help you choose the right loan type and structure to meet your short-term and long-term requirements. Different types of assets and loans come with second and third-order benefits like depreciation or tax concessions.

Here’s a list of the main benefits of working with an asset finance broker:

• Save time and hassle: Our team deals with the paperwork and follows up with lenders so you can focus on running your business.
• Access to multiple lenders: Businesses are limited to a few banks which is not always favourable. We shop around for the best deal that suits your situation and goals.
• Expertise: Not only can we find you the best deal we’ll also make sure we account for tax implications. Especially around things like chattel mortgages, operating leases, and the instant asset write-off scheme.
• Better approval chances: We know which lenders are most likely to say yes to your loan and how to properly structure your application.
• Ongoing support: We’re here for the long haul, not just for a one-off transaction. Regardless of your financial goals, we’re here to support you.
• Honest: We’ll tell you straight up if a deal makes sense or not, and explain everything in plain English.
• Technology and tools: We have access to the latest tools on the market that help us run the numbers and generate your financing options quickly.

Our team is primarily focused on the commercial market as opposed to consumer.

This means we only help Australian businesses obtain asset loans or business loans.

Whether you need a new asset like a vehicle, trailer, or digger, we can help. Our team is also skilled at providing working capital loans, cash flow finance, unsecured loans, startup loans, or any other specific type of business-related funding.