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EOFY: Financing Plant, Equipment and Vehicles

Updated: Mar 13, 2020

The end of financial year is a great time to take advantage of business equipment deals. Planning ahead and thinking carefully about your business needs are key to minimising both tax liability and cash flow impact.

As business owners rush to minimise tax liability and equipment suppliers fight for the dollars those businesses are looking to spend before 30 June, the end of financial year generally sees commercial equipment and motor vehicles heavily discounted.

However, there is very little point to decreasing tax liabilities or making savings by making large purchases or prepaying expenses if doing so will cause cash-flow problems, so planning ahead is key.

With this in mind, BlueKite Capital can provide asset and equipment finance solutions across all industries. It allows your business to hold onto capital that may be put to a use that provides a higher return than the cost of the interest for the finance itself. There are several ways to finance the purchase of business equipment, including straightforward commercial or equipment loans, finance leases, hire purchase, and a host of function-specific products, for example, for medical or technology equipment, for agribusiness, or to purchase energy-efficient equipment that will reduce the cost of business operation.

  • Commercial/equipment loan: the lender provides full or part finance for the purchase and holds a mortgage over the equipment. The mortgagee owns the equipment and makes repayments over a fixed term.

  • Finance lease: the lender purchases the equipment and owns it, leasing it to the business. At the end of the lease term, the business can hand back the equipment or purchase it, and may be able to refinance to fund the purchase.

  • Hire purchase: similar to a finance lease, except the business owns the equipment after the final payment.

For equipment that is continually superseded by newer models, for example computers, finance leases offer a structure that plans for regular upgrades, but care needs to be taken to ensure that the lease period is not any longer than the period in which the technology will be superseded, as it is fixed. This structure also offers businesses the ability to procure the equipment they need without impacting their line of credit, as it is not considered a credit liability.

Speak to Venn Williams, CEO BlueKite Capital on 0416 251 140 or email to discuss your end of financial year finance needs.


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