What is Equipment Finance/ Chattel Mortgage?

What is Equipment Finance and/ or a Chattel Mortgage. Most businesses require equipment in order to operate and make a profit. Equipment and Car Finance is a financial option for businesses to consider regardless of the economic climate.  It is an even more attractive option with our current COVID-19 environment where maintaining cash flow, preserving capital and overcoming flexible financial solutions are critical. According to equipment finance specialist, Will Haylock from Will Finance, a Brisbane based finance broker, despite all the gloom and doom surrounding COVID-19, equipment loans have been on the increase.  This could have to do with the current borrowing rates being at an all-time historic low, and businesses realising how beneficial equipment and technology is to not only their survival but development and growth. Supporting his claim, the government has lifted the tax write off for the 2019/2020 financial year to $150K for business equipment purchases.

Why Equipment Finance?

Machinery loans and car finance are viable options for acquiring various business assets such as cars, trucks, earthmoving, plant & operation equipment.   It is important to know the ins and outs so you can negotiate what is best for your business requirements. The returns and tax benefits need serious consideration in this competitive economic climate but consultation with your accountant is essential to receive up-to-date advice for your business entitlements.

Due to COVID-19 Will Finance has identified lenders are understandably requiring additional information regarding, how the business has coped through the epidemic, what their cash flow is like and how they predict business will operate in the next 6 months.  The current requirements have also slowed approvals from what was once a quick 24 – 48-hour process to a lengthier time frame of up to 96 hours.

Loan Structure for Equipment Finance

Loan terms vary from 3 – 7 years.  Rates vary depending on the financial performance, length of time the business has been operating and the age and type of equipment being purchased.  Equipment loans are also known as chattel mortgages and have the ability to structure repayments inline with the customers cashflow requirements. These loans are usually secured against the asset and owned by the purchaser. As the equipment or vehicle is owned by the business proprietor there is often tax deductions with depreciation, interest and GST on the purchase price.


The Mining industry has kept the Australian economy rolling through this COVID-19 pandemic and Will Finance has seen an increase in these clients acquiring Car Finance, Truck Finance, Earth Moving Equipment and Used Equipment.  

Machinery and equipment are often costly and a large capital outlay that can feel unaffordable and out-of-reach.  Equipment Loans can be flexible to suit specific and often unique business needs.  This assists cash flow, allowing money to be spent in other areas like marketing to develop and grow the business.

Uncertainty, negative economic conditions, and deteriorating forecasts are challenges to growing a business but for those businesses that want to stay competitive – especially during a downward economy – it is critical to be strategic about how you acquire equipment and your finance.  Finance Brokers, that specialise in Equipment Finance like Will Finance can assist with the right finance for your unique needs.

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