This type of finance – for both business and personal use – allows consumers to obtain their asset sooner without the need to purchase it outright. By doing this, you can reduce larger loan costs whilst simultaneously freeing up capital to aid with cash flow.

Equipment finance is a great option for businesses to who are looking to replace old or dated equipment as well as purchase new tools to help their business grow. This could include a number of things such as construction tools, heavy machinery, commercial cleaning products or workplace medical equipment. 

A balloon payment refers to an agreed upon sum of money owed to the lender by the consumer at the conclusion of their loan. If a balloon payment has been taken up, it gives consumers the opportunity to access a reduced monthly repayment rate.

Balloon payments differ from lender to lender and vary based on the agreed upon amount by the two parties. The maximum amount a balloon payment will be is capped at 50 per cent of the total loan amount. For example, if the loan is for $20,000, the maximum balloon payment would be $10,000.

Your loan term is something that should be discussed with your lender when you’re setting up the loan. For asset finance, the maximum loan term you can have is seven years. However, it can be anywhere between one and seven years.

Obtaining a car can be done through either a regular car loan or a novated lease. There are a few main similarities as well as some key differences that you need to consider when deciding what’s best for you. Both options require regular repayments and include the option to add a balloon payment at the conclusion of your loan period. A novated lease means that you’re entering a three-way deal with your lender, your employer and yourself, whilst a car loan is yours from day one. The repayments for car loans are paid with after-tax earnings while novated lease repayments use pre and post-tax pay.