6 Different Types of Asset Finance

Asset Management

Asset financing refers to the use of a company’s balance sheet assets, including short-term investments, inventory and accounts receivable, in order to borrow money or get a loan. The company borrowing the funds must provide the lender with security interest in the assets.

Below is an introduction to these main types of asset finance.

Commercial Hire Purchase. With this type of finance, you hire and use the asset until the last payment.

  • Chattel Mortgage
  • Finance Lease
  • Novated Lease
  • Operating Leases
  • Fleet Operating Lease
  • Technology Rentals / Lease.

Choosing the right type of asset finance can help save you time and money to invest in growing your business. You can also reduce the risk of owning obsolete equipment and there can be various tax outcomes too.

Macquarie considers all manner of assets for finance. From vehicles for commercial and personal use to heavy machinery and shop fit-outs. We finance equipment such as furniture and technology for offices, medical institutions, retail shops, warehouses and factories.

When considering asset finance options, ask yourself:

  • How much capital do I need to grow my business?
  • When do I need to smooth the bumps in my cash flow?
  • What are the tax outcomes of asset financing?
  • How long will I need the equipment and will I need to upgrade it?
  • Is technology rapidly changing in my industry?
  • Do I want to ‘finance to own’ or ‘finance to return’ my asset?

Generally speaking, asset finance options include: Commercial Hire Purchases; Financial and Operating Leases; Chattel Mortgages; Novated Leases; and Technology Rentals. Each is suited to different commercial circumstances, so when considering your options, you may want to talk to your accountant or tax advisor. Below is an introduction to these main types of asset finance.