Loan Products

What types of finance loans are there?

For business, when deciding on the type of loan that best suits your needs it is always best to consult your Accountant for advice on the product that you should be funding your asset purchase.

95% of SME’s (Small to medium Enterprise) use Chattel Mortgage based on its simplicity and taxation benefits. It is most likely that your purchase would be funded on a Chattel Mortgage however please check with your accountant first.

Your main asset finance products are:

  • Chattel Mortgage
  • Hire Purchase
  • Finance Lease
  • Small Ticket Finance
  • Operating Lease
  • Novated Lease
  • Insurance Premium Funding
  • Consumer Loans

More information on finance products

Chattel Mortgage

The equipment belongs to you from the beginning and the lender has a ‘charge’ over the equipment that secures the loan until the final payment’s made. A major benefit is that you can claim the GST on the purchase on your next BAS claim.

Hire Purchase

A Hire Purchase Agreement is when the lender agrees to purchase the vehicle on your behalf and then hires it back to you over a set period. You’ll have full use of the vehicle for the term of the contract, you just won’t be the owner. At the end of the term, when the total price of the vehicle and the interest charges have been paid in full, the customer can then take ownership of the vehicle. This can be a good choice if you are registered for GST on an accruals or cash accounting basis.

Finance Lease

A finance lease is a form of finance that allows a customer (that’s you) the use of a vehicle/equipment while enjoying all the benefits of ownership. However, technically the financier owns the car until you finish your lease term and make the necessary residual payment. Agreements are flexible and payments can be calculated monthly or quarterly, half yearly or annually. At the end of the term, a residual value is paid (predetermined at the commencement of the lease) to acquire the goods from the financier. This way your rentals can be structured to meet your cash flow requirements.

Small Ticket Finance

We have access to lenders who will finance items at a cost as low as $5,000.00.

Conditions and price vary from lender to lender, but options do include not having to provide financial statements for transactions up to $25,000.00.

Operating Lease

An operating lease is a type of lease in which the financier retains ownership of the asset. Under an operating lease there is no predetermined residual value to pay, however a client may choose:

  • to hand back the equipment and upgrade
  • to hand back the equipment
  • to continue to lease/rent the equipment
  • to make an offer to purchase the equipment at fair market value
Novated Lease

Under a novated lease, an employee leases a motor vehicle from the financier using a normal lease agreement. A novation agreement is entered into between the employee and the financier, under which the employee’s obligation to pay the rental is transferred to the employer for the term of the agreement or until employment ceases. Therefore the employer pays the lease rentals direct to the financier.

The car remains with the employee should he leave the employer and a new novated agreement can be entered into with a new employer.

There may be tax advantages to all parties under a novated lease agreement.

Insurance Premium Funding

Annual insurance premiums exceeding $10,000.00 can be funded over six, nine or twelve monthly payments, which can assist with your cash flow requirements.

Consumer Loans

A consumer loan is when a person borrows money from a lender (rather than a company or a trust). There are several types of consumer loans however the main types are either an unsecured or secured loan.

Australian Credit Licence 392575

Flex Home Loans and Finance

238 Main Street, Bacchus Marsh VIC 3340

03 4301 4170

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