Asset Finance

Asset financing is the process of obtaining a loan or line of credit using an asset as collateral. This can include items such as accounts receivable, inventory, or other assets that a business may have. The lender will evaluate the value of the asset used as collateral and the creditworthiness of the company to determine the loan amount and interest rate. If the borrower is unable to repay the loan, the lender may take possession of the asset. We provide short-term asset finance with no doc and no credit checks at flexible terms.

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Asset financing can also be used to purchase assets such as real estate, vehicles, or equipment, with the asset being used as collateral for repayment of the loan.

How does Asset Finance Work in Australia?

Asset financing in Australia enables businesses to secure funding for the acquisition of new or the upgrade of existing assets. These loans are typically secured and have varying terms and repayment periods. In Australia, there are many asset finance options available through financial brokers, though the specifics of each loan, such as interest rates and fees, may vary between lenders. Despite these differences, the overall process of asset finance remains the same.

How does Asset Finance Work in Australia?

Asset financing in Australia enables businesses to secure funding for the acquisition of new or the upgrade of existing assets. These business loans are typically secured and have varying terms and repayment periods. In Australia, there are many asset finance options available through financial brokers, though the specifics of each loan, such as interest rates and fees, may vary between lenders. Despite these differences, the overall process of asset finance remains the same.

Eligibility Criteria and Steps for Applying for Asset Finance

Specialist lenders in Australia, such as Basic Finance, offer quick approval times for asset finance, with the ability to apply and receive funding within 24 hours in some cases. They also provide a streamlined application process that makes evaluating and applying for options easy.

When applying for asset finance, you will need to demonstrate the ability to repay the loan and meet the lender’s specific requirements such as having an ABN and GST registration, a good credit rating, a minimum turnover and a limit on any other debt. You may also be required to provide additional documentation such as proof of identity, financial statements, business bank statements, rental information and the details of the asset you wish to purchase.

For those in need of assistance, business machinery finance and professional help are available through asset loan brokers throughout Australia, including cities such as Sydney, Melbourne, Brisbane, Perth, Adelaide, Newcastle, and Canberra. We provide services all over Australia, contact us for more information.

What are the requirements for Asset Finance?

The requirements for asset finance are straightforward. Typically, you will need to provide the following documents: proof of business ownership and an ABN, GST registration for the business, permanent citizenship or residency, evidence that the business has been operating for at least six months, and business bank statements. Additionally, it’s important to consider whether asset finance is the best option for your business needs. Contact us for more information.

Types of Asset Funding

There are several types of asset finance available in Australia, including:

Hire Purchase

This type of financing allows a business to acquire a specific asset in instalments, similar to purchasing furniture for a home.

Finance Lease

Finance Lease is also known as a capital lease, this type of financing involves a leasing company purchasing an asset for a business and then leasing it back to them. Monthly payments, called the primary rental period, are made until the cost of the equipment is fully paid, including interest.

Equipment Lease

Similar to finance leasing, this type of financing allows a business to lease equipment from a supplier or leasing company for a specific time frame and regularly pay to use the asset. At the end of the contract, the business becomes the owner of the equipment.

Operating Lease

This type of financing is similar to finance leasing and is useful for businesses that only need specialized equipment or plant for a short period. The asset is rented for a medium or short term with regular payments over the duration it is in use.

Asset Refinance

This type of financing involves a business pledging its assets as collateral for a loan. If the business falls behind on loan payments, the lender can sell the assets to recover the funds. Additionally, Asset Refinance has another type called Asset-based lending or Hire purchase and Sale, where a business can sell a tangible asset to a specialist finance firm in exchange for a lump sum, and then lease back the asset.

Advantages of Asset Financing

Asset finance provides a straightforward option for acquiring items that your regular cash flow cannot cover. There is no need for additional collateral as the asset itself serves as collateral. Additionally, there may be tax benefits for asset purchases. It encompasses various solutions for financing various assets such as car fleets, vehicles, equipment, and even property. It typically has lower interest rates and higher approval rates compared to unsecured credit cards for businesses. Repayments are fixed and easy to plan for, making it a long-term and flexible alternative to capital.

Disadvantages of Asset Finance

Purchasing an asset may require a deposit of 5-10% in advance. While the asset may remain in good condition during the repayment period, it could become obsolete and therefore worthless. Additionally, the cost of asset valuation should be factored into the cost of the purchase. Lastly, some assets may have limitations on usage, such as an annual mileage limit for a vehicle. Exceeding these limits could result in a costly bill at the end of the contract period.

Case Study: Asset Financing for a Retail Agency

After two years of successful operation, a retail agency has seen a steady increase in potential sales and customer base. In order to continue expanding, the agency wanted to hire new staff and acquire company vehicles with its branding and logos. To do this, they needed extra funding and were refused by banks.

Fortunately, they applied for vehicle financing with BFl Financial and were granted asset finance of $40,000 to purchase a car and additional marketing stickers. The company began repayment of the loan almost immediately and the increased activity in marketing and managing more business activities resulted in higher profits, which they used to pay additional payments.

Instead of repaying the loan in full, the organization chose to adjust the initial loan to another $40,000 and continue this process each time the team grew. After three months, the agency paid back the asset finance in full and then decided to revisit its position in the next year with more staff, vehicles, and a strong relationship with our financial team. They were ultimately our satisfied customers.

Case Study: Asset Financing for a Retail Agency

After two years of successful operation, a retail agency has seen a steady increase in potential sales and customer base. In order to continue expanding, the agency wanted to hire new staff and acquire company vehicles with its branding and logos. To do this, they needed extra funding and were refused by banks.

Fortunately, they applied for vehicle financing with BFl Financial and were granted asset finance of $40,000 to purchase a car and additional marketing stickers. The company began repayment of the loan almost immediately and the increased activity in marketing and managing more business activities resulted in higher profits, which they used to pay additional payments.

Instead of repaying the loan in full, the organization chose to adjust the initial loan to another $40,000 and continue this process each time the team grew. After three months, the agency paid back the asset finance in full and then decided to revisit its position in the next year with more staff, vehicles, and a strong relationship with our financial team. They were ultimately our satisfied customers.

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Frequently Asked Questions (FAQs)

What is asset finance used for?

Asset finance is typically used to purchase business items with a long-term lifespan and can cost significantly. Most of the time, it includes IT equipment and machines.

How much can I borrow?

Most of the time, based on the required amount. You can borrow up to $2000000 of an asset loan through any private lender in Australia. Contact us for more information.

What is the minimum deposit/documentation required?

For businesses looking to finance assets, the following documents are required:

  • Business Owner’s ABN
  • Evidence that the business is registered for GST
  • A minimum of six months of business operations
  • Business bank statements to demonstrate financial stability and creditworthiness

Can You Obtain Asset Financing with a Bad Credit Score?

If you are looking for asset financing, the lenders will focus on the reliability and creditworthiness of your business rather than your personal credit score. This means that even if you have a not-so-perfect credit score, you can still find lenders who are willing to approve your asset financing requests. Don’t worry about your bad credit rating – contact us for further assessment and guidance.

What are the interest rates?

Asset financing can be an attractive option for businesses that are looking for a loan to purchase an expensive piece of equipment or a commercial property. The interest rates for such financing typically differ from traditional loans, such as mortgages or personal loans, since lenders are taking on more risk. The actual rate will depend on several factors, such as the type of asset being financed, the creditworthiness of the borrower, and the length of the loan term. Generally speaking, rates for asset financing are higher than for other forms of financing. To get a better idea of the rates offered, it’s best to contact a lender or financial institution directly.

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