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 arrange forklift finance.
Two simply 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.