Astute Financial Management can offer Equipment Finance for most Business purposes.All products listed below are for the financing of goods and equipment for your business.
Astute Financial Management offers the following overviews explaining the basic differences between different lending options available, you should verify this with your accountant:
The financier pays the full amount of the invoice. You cannot have any equity in a lease transaction (invoice is made out to the financier for delivery to your company), the quotation (repayments and residual value) are calculated on the total cost of the goods less the GST on the invoice up to the luxury car limit.
Each repayment and the residual value attract GST and you would claim the GST per payment in your quarterly BAS statement.
The financiers lease document is their TAX INVOICE. Lease payments and residual value noted in the document are inclusive of GST. If you repay the agreement prior to the expiry date the payout figure is inclusive of GST and financier will forward a Tax Invoice for payout when finalizing the account. If the agreement is repaid in terms of original arrangements GST is noted as stated in their agreement.
For company tax purposes you would claim the lease payment exclusive of GST – but for luxury vehicles you should verify with your accountant.
For BAS purposes you would claim the GST portion of the instalment.
Chattel Mortgage / Equipment Loan
(used if you are on cash accounting for BAS and wish to get the GST back following funding of the transaction)
You may have equity in the goods being financed, therefore the financier will pay the full amount of the invoice or if you wish to pay a deposit the difference between the cash price of the goods and the deposit you.
The invoice is made out to your company and the financier takes a charge over the goods you are financing, for e.g., if it is a motor vehicle they register their interest in it on the Motor Vehicle Security Register.
As the invoice for the goods is made out to your company or business you will claim the GST on the capital purchase from the invoice.
The financiers documents will have no GST in either the repayment stream nor the balloon payment if you choose to have one. If you wish to sell and terminate the contract early the payout figures has no GST in it either, which you should bear in mind if you are selling the goods as you would have to pay GST on the sale.
For company tax purposes you claim interest and depreciation of the goods.
(used if you are on accrual accounting for BAS, you claim the GST on the goods from the financiers document which is their tax invoice)
You may have equity in the goods being financed, the financier will either pay the full invoice price or the balance of the invoice after your deposit or trade.
The invoice is made out to the financier for delivery to you.
The financier documents are their tax invoice. The calculations for the transaction deduct GST from the transaction and then add it back for the finance transaction. Instalments and balloon payment are calculated on the total amount of the finance required including GST.
The financiers documents will have no GST in either the repayment stream nor the balloon payment. If you wish to sell and terminate the contract early the payout figure has no GST in it either, which you should bear in mind if you are selling the goods as you would have to pay GST on the sale.
For your business tax purposes you claim interest and depreciation on the goods and finance.