Excavator financing options in Australia
Excavators are essential pieces of machinery for a variety of industries such as construction, mining, and agriculture. They are used for a range of tasks including digging, earthmoving, and demolition. Purchasing an excavator can be a significant investment, and for many businesses, financing may be the best option. In this article, we will discuss the different excavator financing options available in Australia.
- Equipment loans
An equipment loan is a popular financing option for businesses looking to purchase an excavator. These loans are designed specifically for the purchase of machinery and equipment and offer a range of benefits such as flexible loan terms, fixed or variable interest rates, and the ability to make extra repayments.
With an equipment loan, the excavator is used as collateral, which means that the lender has the right to repossess the excavator if the borrower fails to make their loan repayments.
- Chattel mortgage
A chattel mortgage is another financing option for businesses looking to purchase an excavator. This type of loan is similar to an equipment loan, but with a chattel mortgage, the borrower owns the excavator from the outset. The excavator is used as security for the loan, and the lender takes a mortgage over the asset.
One of the benefits of a chattel mortgage is that the borrower may be able to claim the GST paid on the purchase price of the excavator as a tax deduction. Additionally, with a chattel mortgage, the borrower can tailor the loan repayment structure to suit their cash flow requirements.
- Hire purchase
Hire purchase is a financing option where the borrower hires the excavator from the lender for an agreed-upon period. The borrower makes regular payments during the hire period, and at the end of the hire period, they have the option to purchase the excavator outright.
One of the benefits of hire purchase is that the borrower can claim the interest paid on the loan as a tax deduction. Additionally, as the excavator is owned by the lender during the hire period, the lender is responsible for maintenance and repairs.
- Leasing
Leasing is a financing option where the borrower leases the excavator from the lender for an agreed-upon period. Unlike hire purchase, at the end of the lease period, the borrower has the option to return the excavator to the lender or purchase it outright.
Leasing offers several benefits such as fixed repayments, flexible terms, and the ability to upgrade the excavator at the end of the lease period. Additionally, as the lender owns the excavator during the lease period, they are responsible for maintenance and repairs.
In conclusion, purchasing an excavator is a significant investment, and financing may be the best option for many businesses. By exploring the different excavator financing options available in Australia, businesses can choose the option that best suits their cash flow requirements and financial goals.
