Finance & Leasing
RENTAL
Ownership: Renting is an operating lease where ownership is not the motivation but where upgrading to new equipment during the term, is easy. If you don't upgrade, equipment is returned at the end of the term. Alternatively if you wish, you could keep renting or make an offer to purchase the equipment.
Residuals: Normally there are no residuals in a rental agreement.
Accounting: Rental costs are written off in the month they are incurred. Rental costs are normally treated as deductible expenses for businesses*. GST and stamp duty are paid with each instalment.
*Please refer to your Accountant or Advisor for Tax advice.
Balance Sheet: Rental equipment is not shown on the Balance Sheet and neither are the rental payment liabilities, other than due or overdue payments.
Upgrades and Add On: The main advantage of a rental is easy upgrades and add ons.
LEASING
Ownership: The financier owns the equipment until the final payment, including any residual, is paid. Then ownership is transferred to the lessee.
Residuals: There is usually a residual value, which is owed to the financier at the end of the term. It is often calculated as a percentage of the original purchase price. In the case of residuals there is a risk the equipment will not be worth the residual payment.
Accounting: The purchase price under a finance lease is treated as a capital purchase and depreciated over the life of the asset. The interest cost is also treated as an expense. GST and stamp duty are payable with each instalment. Normally lease payments are treated as deductible expenses for businesses. *
* Please refer to your Accountant or Advisor for Tax advice.
Balance Sheet: Both the asset and liability are shown on the balance sheet.
Upgrades and Add On: Upgrades and add ons generally require another lease and/or the payout of the old lease - a penalty may be incurred for this.
COMMERCIAL HIRE PURCHASE
Ownership: Ownership is transferred to the hirer at the commencement of the hire purchase contract. GST and stamp duty are not paid on the instalments.
Residuals: Hire purchase agreements often contain options for residual or balloon payments at the end of the term. Where a balloon option is taken, there is a risk the equipment will not be worth the residual payment.
Accounting: The purchase price under a hire purchase contract is treated as a capital purchase and depreciated over the life of the asset. The interest cost is also treated as an expense. GST and Stamp duty are accounted for at the start. Under a hire purchase, contract depreciation and interest charges are normally treated as deductible expenses for businesses.*
* Please refer to your Accountant or Advisor for Tax advice.
Balance Sheet: Both the asset and liability are shown on the balance sheet including GST and Stamp duty.
Upgrades and Add On: Upgrades and add ons generally require another hire purchase agreement and/or the payout of the old hire purchase agreement - a penalty may be incurred for this.
DEBTOR FINANCE
Debtor finance involves Factoring and Invoice Discounting facilities, which provide a flexible and cost effective line of credit. Together they can give funding of up to 90% of the value of your debtor's ledger. You may draw funds as required and interest is charged only on what you utilise thus providing a flexible funding package that reacts to the changing cash needs of a growing business.
BUSINESS ACQUISITION FINANCE
Business acquisition finance includes franchises, new businesses and existing businesses. Purchase may be achieved through various finance methods including loans, hire purchase, lease or rental of assets and repayment over various periods according to individual requirements.
COMMERCIAL REAL ESTATE LOANS
We will achieve the highest gearing at the lowest interest rates on commercial property.
HOUSING LOANS - PERSONAL AND INVESTMENT
We will explain what is available and the meaning of all the technical terms. We will explain security usually taken on first home loans and advise on redraw, portability, fixed rate versus variable rate compared to split rate and lines of credit.
PERSONAL FINANCE
There are so many forms of personal finance please contact one of our brokers for a personal assessment.
INSURANCE PREMIUM FUNDING
Insurance Premium Finance is available to business customers only for commercial purposes. We can organise both cancellable and non-cancellable insurances including Commercial Motor Vehicle Registration fees and Workers Compensation insurances can be financed. Personal insurances cannot be financed.
CASH FLOW FUNDING
Cash flow funding includes a premium range of short term lending products, which will help you spread your business expenses over convenient monthly payments. Business expenses include, GST payments, Professional fees, Company Tax, Rates and other high one-off costs. Cash flow funding provides a flexible finance package that reacts to the changing cash needs of a growing business.
ASSET LOANS
Westminster National can arrange finance for those customers who own property (or wish to own property) and may have had difficulty in raising finance through traditional lenders such as banks. Typically these customers may have start-up businesses, defaults/judgements or may not wish to provide the usual supporting financial information requested by traditional lenders.