When the banking industry was deregulated, it opened up the Australian Finance Market to a lot of different options when it comes to how finance can be arranged for equipment, here we look at two of the most popular ways to finance your Forklift.
- Minimal capital outlay
- Payments are fixed for the lease term
- At the end of the lease term, the following options are available :
- Extend the lease term
- Trade in the forklift and lease a new forklift
- Return the forklift. You may be responsible it there is shortfall between sale proceeds and the outstanding residual value amount
- Make an offer to purchase the forklift for the residual value.
- A hedge against market fluctuations with interest rates fixed for the term of the lease
- Ownership is optional
- Leasing frees up capital which can be used to grow your business
- Pay only for equipment use
Commercial Hire Purchase
- For accounting and tax purposes you own the asset
- Payments can be structured to suit a company cash flow
- Generally repairs and maintenance is not included in the Commercial Hire Purchase.
- Balloon payments can be arranged at the expiration of the term and refinanced where required
- Business retains fund for working capital purposes.
- Depreciation and interest costs can be claimed by the hirer which reduces tax payable on net profits.
- You own the forklift on termination of the contract.