The equipment loan that quietly cost you the property deal.
Asset finance is the easiest lending to arrange and the easiest to get wrong, because it is usually arranged in isolation.
The dealer offers finance. The equipment supplier offers finance. It is quick, the paperwork is short, and the rate looks acceptable against the size of the purchase. What it does to your total debt position, your servicing capacity, and your ability to fund the next property purchase rarely comes up at the dealership. We make sure it does.
Choosing the right finance structure
Chattel mortgage, finance lease, or operating lease. These are not interchangeable, and the difference has real consequences. Ownership sits differently. The tax treatment differs. Depreciation, goods and services tax (GST) timing, and whether the asset appears on your balance sheet all follow from which instrument you use. That is your accountant's call, not ours. What we will do is make sure the accountant is in the conversation before the dealer's finance document is signed, because it is very difficult to change afterwards.
How asset finance affects your other borrowing
This is the part the dealer finance conversation does not cover. Every facility you hold is assessed by every other lender you approach. An equipment facility taken at speed, on ordinary terms, sits on your debt schedule and consumes servicing capacity you may need for a property purchase in eighteen months. Whether it is secured against the asset alone, or whether it reaches into a general security agreement over the business, matters enormously and is frequently not read.
What we do
- We look at the whole debt position first. Then the asset.
- We keep the security specific. An asset facility should be secured against the asset. A general security agreement over the entire business, taken to fund a vehicle, is a poor trade.
- We put our options side by side with the dealer's offer. Sometimes dealer finance is the best available and we will tell you so.
- We work with your accountant. How the finance is set up affects your tax, and that usually matters more than the rate.
When to talk to us
Before you sign anything at the dealership, and ideally before you have chosen the asset. If you are also planning a property purchase or a business facility in the next two years, the asset finance decision should be made inside that plan rather than alongside it.
Common questions.
What can asset finance be used for?
Vehicles, plant, machinery, equipment and technology for your business.
Should I just take the dealer's finance?
Sometimes it is the best option. It is worth comparing first, because dealer finance is arranged in isolation and can affect how much you can borrow for other things, such as a property.
What is the difference between a lease and a chattel mortgage?
With a chattel mortgage you own the asset and the lender takes security over it. With a lease, the finance company owns the asset and you pay to use it. The tax treatment differs, so your accountant should be involved.
Will an equipment loan affect a future mortgage?
It can. Every lender you approach will look at the repayments on your existing finance. Planning the two together can protect your borrowing capacity.
What clients say about working with Carl.
Carl was an absolute pleasure to work with. His knowledge, professionalism and prompt communication gave us confidence throughout our first home purchase. He secured us an excellent deal with Westpac and made the entire process seamless. We highly recommend Carl to anyone looking for a mortgage broker.
Three of us, all self employed, wanted to get a home loan for a shared house. Without the expertise, help and the precise instructions to fill in the various documents or organise specific items we would not have had a chance to get the mortgage over the finish line. Carl was extraordinarily helpful and always found a way to continue this not so easy application. I can highly recommend Carl. Very grateful for his assistance.
Carl was fantastic to work with. Our mortgage application was not straightforward as we were multiple people, all self employed with new businesses. We had tried using other brokers but they weren't able to get our approval across the line. Carl was tenacious with the banks, and had so much knowledge he was able to guide us through all the information we required and how to present it. After a difficult process he was able to secure us a mortgage with very favourable terms. I couldn't recommend him enough, the effort and work he puts in is second to none!
Carl Mann is a fantastic mortgage broker. He is knowledgeable, professional, and has excellent communication. Carl kept us updated along the way and provided sound advice. I would definitely recommend Carl to anyone needing assistance with mortgage finance or refinancing.
Carl helped us work through the finance for our next investment property without losing sight of our existing lending. He understood what we were trying to build over the longer term and worked through the different options with us before we made an offer. That preparation made the purchase much smoother.
Development finance was very different from arranging a normal mortgage. Carl understood the feasibility, valuations, build costs and timing the lender needed to see, and helped us get everything organised before it went to credit. Having someone who understood the development side of the deal saved a lot of back and forth.
We were purchasing premises for our business and needed someone who could look at both the property and the strength of the business behind it. Carl worked through the numbers with us, explained what the lenders would focus on and helped structure the application properly from the start.
Before you sign at the dealership.
A short conversation now can protect the borrowing capacity you will need later.
Every conversation is confidential.
Book a conversation