If you’re looking to get your new asset sooner, asset finance is one option you could choose. This option allows you to obtain larger assets through hire or lease without the need to purchase the asset outright. There are many benefits of asset finance for both business and personal use.

• The potential to reduce larger loan costs
• Can free up capital
• Gives you the opportunity to improve your cash flow
• Gets you your new asset faster

Equipment finance is the perfect solution for businesses that heavily rely on machinery, tools, and equipment to operate. This financial option can be used for a range of things, including:

• Work tools
• Trade tools
• Office computers
• Heavy machinery
• Farming equipment

A balloon payment refers to the lump sum of money owing at the end of your loan. It’s often an option taken by borrowers to reduce the monthly repayment amount throughout the loan. Balloon payments can be negotiated with your lender.

Balloon repayments differ from lender to lender. The maximum amount of money you’ll pay in your balloon payment is capped at 50 per cent of the loan amount, meaning, if you have a 50 per cent balloon on a $30,000 car loan, you will pay a balloon payment of $15,000 after your loan term.

Asset finance is perfect for those who want to get their new asset sooner. The longest loan you can have for this financial solution is seven years when it comes to loan terms. Be wary that you’ll pay more interest the longer your loan.

Novated leases and car loans have similar features and some key differences.

Regular repayments are made for both.

• Balloon payments are an option at the end of each loan.
• A novated lease is a three-way deal between you, the lender, and your employer.
• You own the vehicle from day one with a regular car loan.
• Once the loan term ends on a novated lease, and the balloon payment has been repaid, you own the vehicle.
• After-tax earnings are used to finance a car loan, whereas pre and post-tax pay is used for a novated lease.