Acquiring new assets is a constant of personal and business growth. In many situations acquiring an asset when you need it opens up opportunities to make money, work more efficiently or just free up cash flow.

•    Manage cash flow problems
•   Capitalise on opportunities as they arise
•   Get your hands on new assets sooner

For businesses that utilise heavy machinery or technology as a part of their daily operations, equipment finance can be a fundamental part of maintenance and expansion.

•   Maintaining and purchasing heavy machinery
•   Purchasing equipment in line with business growth
•   Keeping up with technology changes as the business landscape transforms
•   Replacing or purchasing trade tools

A balloon payment is a lump sum owed to the lender at the end of a loan term after all regular monthly repayments have been made. This allows you to repay only part of the principal of your loan over its term, reducing your monthly repayments in exchange for owing the lender a lump sum at the end of the loan term.

Balloon payments vary in amount, but the general rule of thumb is 50 per cent of the total loan value. So for a $30,000 loan, you could have a $15,000 balloon payment.

Regardless of the loan, it’s important to keep in mind that you’ll pay more interest the longer your loan term is. For asset finance, the longest loan term lenders will allow is seven years.  However, most offer options between one and seven years.

Novated lease and car loans have similar features, but also some key differences.

•   Regular repayments are done for both. 
•   Balloon payments are an option at the end of each of these loans. 
•   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.