Understanding Asset Finance for Work Vehicles
When your Melbourne business needs to purchase a work vehicle, whether it's a truck, trailer, excavator, tractor, or other specialised machinery, Asset Finance provides a practical solution. Rather than using your available capital to buy equipment outright, Asset Finance allows you to spread the cost over time through fixed monthly repayments while preserving working capital for other business needs.
Asset Finance encompasses various finance options designed specifically for acquiring business equipment and vehicles. From utes and vans to heavy machinery like graders, cranes, and dozers, you can access Asset Finance options from banks and lenders across Australia through experienced brokers like OVM Finance Group.
Types of Asset Finance Solutions
Several finance structures are available when buying new equipment or upgrading existing equipment for your business:
Chattel Mortgage
A chattel mortgage is one of the most popular options for business equipment funding. Under this arrangement:
- You own the vehicle from day one
- The vehicle serves as collateral for the loan
- You can claim tax benefits through depreciation
- GST treatment allows you to claim input tax credits where applicable
- A balloon payment can be structured at the end of the term to reduce monthly repayments
Hire Purchase
With Hire Purchase, you make regular payments over the life of the lease, and ownership transfers to you after the final payment. This option:
- Requires no balloon payment
- Allows you to preserve capital while acquiring necessary equipment
- Provides certainty with fixed monthly repayments
- Offers tax benefits through depreciation claims
Finance Lease
A finance lease structure means the lender owns the vehicle throughout the lease term. At the end, you can:
- Purchase the vehicle for a pre-determined amount
- Refinance the residual value
- Return the vehicle and upgrade to newer equipment
Operating Lease
An operating lease suits businesses with regular upgrade cycles. The equipment remains off your balance sheet, and you simply return it at lease end, making it ideal for businesses wanting to access the latest equipment without long-term ownership.
Ready to get started?
Book a chat with a Mortgage Broker at OVM Finance Group today.
Commercial Vehicle Finance Across Industries
OVM Finance Group understands that different industries have unique requirements:
Construction Equipment Finance
Construction businesses often require substantial machinery purchases. Whether you need excavators, dozers, or other heavy equipment, construction equipment finance provides the funding necessary while allowing you to manage cashflow effectively. The asset-based lending approach means the machinery itself provides security.
Fleet Finance
Businesses operating multiple work vehicles can benefit from fleet finance arrangements. This consolidated approach to commercial vehicle finance streamlines administration and can provide favourable terms across your entire vehicle fleet.
Medical Equipment Finance
Healthcare practices requiring specialised diagnostic equipment or treatment technology can utilise medical equipment finance to stay current with advancing technology without depleting reserves.
Hospitality Equipment Finance
Restaurants, cafes, and hotels can acquire kitchen equipment, refrigeration systems, and other essential items through hospitality equipment finance arrangements.
Technology Equipment Finance
Businesses needing computers, servers, or other office equipment can access technology equipment finance to maintain up-to-date systems crucial for operations.
Key Considerations When Financing Work Vehicles
Interest Rate and Loan Amount
The interest rate you receive depends on several factors including your business's financial position, the loan amount requested, and the type of vehicle or equipment being financed. Working with a mortgage and finance broker provides access to multiple lenders, increasing your chances of securing favourable terms.
Vendor Finance vs Independent Lending
Dealer finance or vendor finance offered at the point of sale can appear convenient, but independent equipment finance through a broker often provides more flexibility and potentially more favourable terms. A broker can compare options across numerous lenders rather than being limited to one vendor's preferred financier.
Balloon Payments
Structuring a balloon payment at the end of your loan term reduces your fixed monthly repayments, helping you manage cashflow during the loan period. However, you'll need to plan for either refinancing or paying out this amount when it falls due.
Tax Benefits and Depreciation
One significant advantage of asset finance for work vehicles is the tax benefits available. Depreciation deductions and interest expense claims can provide substantial tax relief. The specific GST treatment depends on your chosen finance structure, so consulting with your accountant alongside your finance broker ensures you maximise these benefits.
Preserving Working Capital for Business Growth
Many Melbourne businesses find that using available capital to purchase vehicles and machinery outright limits their ability to respond to opportunities or manage unexpected expenses. Asset Finance allows you to:
- Preserve working capital for day-to-day operations
- Maintain reserves for business growth initiatives
- Spread equipment costs over the useful life of the assets
- Acquire necessary equipment without depleting cash reserves
The Application Process
When applying for commercial equipment finance through OVM Finance Group, the process typically involves:
- Discussing your business needs and the vehicle or equipment required
- Reviewing your borrowing capacity and financial position
- Comparing finance options from multiple lenders
- Selecting the most suitable structure for your circumstances
- Submitting your application with supporting documentation
- Receiving approval and arranging settlement
Working with experienced finance professionals means you benefit from established relationships with lenders and knowledge of which structures suit different business situations.
Why Choose Professional Finance Advice
Asset-based lending can be complex, with various structures offering different advantages depending on your business circumstances. A professional finance broker helps you:
- Access a wide range of lenders and products
- Understand the implications of different finance structures
- Structure repayments to align with your cashflow
- Maximise available tax benefits
- Navigate the application and approval process efficiently
Whether you're looking to purchase your first work vehicle, upgrade factory machinery, or finance specialised equipment, OVM Finance Group can help you find suitable finance solutions for your machinery purchase needs.
Moving Forward with Your Equipment Finance
Investing in the right work vehicles and equipment is essential for business operations and growth. Asset Finance provides a practical pathway to acquire what you need while maintaining financial flexibility.
OVM Finance Group works with Melbourne businesses across all industries, from trades and construction to healthcare, hospitality, and professional services. Our team understands the importance of timely equipment acquisition and works to secure appropriate financing for your business needs.
Whether you need a single vehicle or are looking at comprehensive fleet finance, exploring your options with an experienced broker ensures you make informed decisions that support your business objectives.
Call one of our team or book an appointment at a time that works for you to discuss your equipment finance requirements and discover how we can help your Melbourne business access the work vehicles and machinery you need.