Understanding The Benefits And Utility Of Vehicle And Equipment Finance

Understanding The Benefits And Utility Of Vehicle And Equipment Finance

Nowadays, it is not possible for small-cap businesses, mid-cap or even giant business houses to spend bulk amount from their accounts for equipment and vehicles, since without these tools it may even be difficult to start the procedure of business. Therefore, instead of punching a hole in your business account with such massive investment at any point of your business, borrowing with vehicle and equipment finance can be a smart way. These types of loans are beneficial for meeting your commercial purchasing requirements of commercial tools, vehicles, POS system, trailers, industrial machinery earthmoving equipment, office furnishing, hardware’s or trucks.

Benefits of vehicle and equipment finance

  • Vehicle and equipment finance options are tax deductible in most cases.
  • Helps you to manage better cash flow and your savings for other business requirements.
  • Instant management of finance.
  • Desirable options for loan repayment term.
  • Easy to avail because less paper-work is required
  • Fast cash
  • Any size of the business is eligible for it.

There are various types of vehicle and equipment finance which can be availed by entrepreneurs in order to start or upgrade and grow their business. Every type of financing comes with its own ideal set of advantages.

Hide Purchase

Under this type of finance, the vehicle or equipment which you buy is subjected to definite payment terms where each repayment installments enables you to gain equity over the asset. The asset is immediately transferred to you once the repayment is complete. Apart from the interest amount that you pay, even the rate of depreciation of the purchased item is tax deductible. The purchased item is taken to be the security if any required, for in most cases no primary deposit is necessary. There are both options available that is 100% finance or up-front repayment to minimize monthly rentals. You can even seek for balloon repayment scopes, for many financing companies offering hide purchase, do offer it.

Chattel Mortgage

Looking for a deal which can offer you the asset ownership from the first day, then it is definitely chattel mortgage vehicle and equipment finance which while giving your financer the assurance and credit over a  Bill of Sale offers you the ownership. Moreover, you do not need to mortgage any added security. Even in this finance type you get 100% finance or up-front repayment scopes. Most of the other features stand to similar like that of hide purchase. Another essential advantage for entrepreneurs is that there stands to be no GST payable on monthly rental installments. This type of finance comes with a fixed rate of interest which again gives you a finance management advantage, where your monthly repayment amount does not fluctuate with the market but remains constant throughout the loan term.


Lease means offering the product being financed for on a rental basis. You do not possess the ownership of the vehicle or the equipment throughout the lease term or even after that. The lender or bank allows the borrower to use the product for a fixed term on a fixed rate of interest and routine payment structure. However, at the end of the lease tenure, you have several options:

  • You can return the vehicle or the equipment to the finance company
  • Reinitiate the lease term with a renewing contract
  • Or you can make proceedings and payment to purchase the equipment once in for all.

Therefore, when you have so many financing options to support and manage the finance of your business, why keep your saving at stake. All you need to do is a bit of market research, find all the available schemes under vehicle and equipment finance and choose one accordingly.

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