Financing an asset can help you get your hands on it sooner without having to purchase it outright. Whether it’s for personal or business use, asset finance can reduce larger loan costs, free up capital and improve your cash flow.

Equipment finance can help businesses purchase machinery, tools, and equipment to help them operate, including construction tools, heavy machinery and manufacturing equipment, as well as commercial cleaning, office and medical equipment.

A balloon payment is a sum of money left over at the end of your loan period which is owed to the lender. While this may not be the right solution for everyone, it decreases the monthly repayments for the borrower throughout the course of the loan. The balloon amount can be negotiated with the lender depending on what’s right for you.

The maximum balloon payment will depend on the lender. In most cases, it can be a maximum of 50 per cent of the total loan amount. This means if the balloon payment is 50 per cent on a $20,000 loan, you will owe the lender $10,000 at the end of your loan period.

Lenders will allow you to have a term between one and seven years. However, there are many things to consider when deciding on a loan term that’s right for you, including how much interest you will pay, as the longer the term the higher the interest.

Both car loans and novated leases have regular repayments and the option to include a balloon payment at the end of the loan period. A novated lease is a three-way deal between you, the lender, and your employer. You own the vehicle when the term ends, and you pay for the balloon. With a car loan, you own the vehicle from day one. A car loan is paid with after-tax earnings and a novated lease from pre and post-tax pay.