Running a business on the Gold Coast often requires significant investment in equipment, whether you’re operating a beachfront café, a construction company, or a professional service. Here’s your guide to making smart equipment finance decisions.
Understanding Your Equipment Finance Options
Chattel Mortgage
Perfect for businesses wanting to own their equipment outright while spreading the cost. You’ll own the equipment from day one, can claim GST upfront, and may benefit from depreciation tax deductions.
Equipment Lease
Ideal for items that need regular upgrading, like IT equipment or vehicles. You’ll have fixed monthly payments and can often upgrade equipment at the end of the lease term.
Commercial Hire Purchase
Similar to a chattel mortgage but with different tax implications. You’ll own the equipment after making all payments, making it great for long-term assets.
How to Choose the Right Finance Option
Consider Your Cash Flow
Gold Coast businesses often have seasonal fluctuations. Choose payment terms that align with your busy periods. For example, tourism-related businesses might prefer higher payments during peak season.
Think About Equipment Lifespan
Will the equipment last longer than the finance term? For long-lasting equipment like commercial ovens or heavy machinery, buying might be better than leasing.
Factor in Tax Benefits
Different finance options offer various tax advantages. Discuss with your accountant which structure best suits your business’s tax position.
Common Equipment Finance Mistakes to Avoid
Ignoring the Total Cost
Look beyond monthly payments to understand:
- Interest rates and fees
- Maintenance costs
- Insurance requirements
- Potential upgrade costs
Choosing the Wrong Term
Don’t finance equipment for longer than its useful life. A five-year loan for equipment that needs replacing in three years creates unnecessary costs.
Overlooking Documentation Requirements
Have these ready before applying:
- Recent business financials
- Tax returns
- Bank statements
- Business plans (for larger amounts)
Tips for Success
- Compare offers from multiple lenders
- Read the fine print about early payout options
- Consider seasonal payment plans if relevant
- Keep maintenance records for better resale value
- Plan equipment upgrades in advance
Equipment finance can help your Gold Coast business grow without draining working capital.
Want to discuss your equipment finance options? Contact our team for personalised advice!
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