What is the difference between a Lease, a Commercial Hire Purchase (CHP)?
A CHP is deferred asset acquisition contract. That is, you acquire the asset and schedule the repayments to suit your specific circumstances ie: an acceptable hire payment period at the end of which you make a balloon payment and take unencumbered ownership. The residual value maybe zero or the maximum expected market price of the asset under finance at the conclusion of the term. The Australian Taxation Office (ATO) provides guidelines as to utilisation of residual values.
Do I have to provide any security for Lease or CHP facilities?
Usually the asset is the security. For certain types of equipment (those with poor resale values) financiers may require a small deposit. This is the exception rather than the norm. We work to limit the security or guarantees that are usually required.
Can I still get finance even if my business financial reports arent up to date?
We do prefer have up to date financial statements available in order to provide you with the best rate possible. However, we do offer mortgage products specifically for self-employed applicants that can be used to raise funds for business investment in cases where you may not be able to substantiate your income. If you are applying for a lease, commercial hire purchase or commercial mortgage it is imperative that we receive a copy of your latest financial records.
What information do I need to supply with my application?
In addition to a completed and signed application form, we usually require your last two years financial statements, a signed privacy authority (as appropriate), and a suppliers invoice (for leases and CHPs) or property details (for mortgages). We usually require company directors to guarantee commercial facilities, so details of your personal Asset & Liability statement may be required. We will also need to verify the identity of company directors and require that all applicants and guarantors provide 100 points of identification (a copy of both your drivers license and your passport are sufficient for this purpose).
How long does approval take?
Under normal circumstances, and providing we have all the information we need to assess your application, we can provide a response within 48 hours.
Are interest rates fixed or variable for Lease & CHP facilities?
Both CHP and lease interest rates are fixed, providing you with certainty and protection against rate rises.
What types of equipment can I finance, and how do I organise it?
As a general rule, we can arrange finance for equipment with a demonstratable business purpose. Examples include cars, trucks, earth moving equipment, computer systems, shop & office fit-outs, printing presses, laser cutting equipment, restaurant equipment & aircraft.
What about equipment obsolescence can I upgrade?
Yes, either at the conclusion of the term or upon payout of the facility depending on the type of facility.
Can I borrow against the family home to buy a commercial property?
Yes. Funding can be sought for any legal purpose. In this scenario, we could consider an investment loan, secured by the residence. The proceeds of the loan would then be utilised to acquire either an income producing investment property, or a business asset (for example, business premises).
Can I finance rural or agricultural property?
Yes. The process of borrowing against rural and agricultural is very similar to any other commercial mortgage, with the exception that tighter Loan to Value Ratio (LVR) constraints are applied. Typically we can arrange a mortgage worth up to 40% of the propertys value.