Learn about the benefits of financing a vehicle for small businesses, including flexible finance options, tax benefits, and a range of choices to suit your needs.
If you’re in the transport industry, your vehicle is likely the core of your business. Buying a vehicle can require a lot of money upfront, so financing might be a better option for small businesses starting from scratch. There are different types of financing available, each with varying terms to suit your business needs. It’s important to consider your cash flow, budget, and the finance terms to choose the best option for you.
One reason to consider financing your vehicle is that there is a wide range of finance options available, including a finance lease, commercial hire purchase, chattel mortgage, novated lease, and business loan. Each has its own advantages and disadvantages, so it’s essential to research and consult with experts before making any decisions.
Another reason to consider financing is the potential for tax benefits, which vary depending on the finance option you choose. For instance, under a chattel mortgage, you can claim interest charges and depreciation as a tax deduction. On the other hand, a finance lease allows you to claim a deduction for the entire lease. It’s crucial to ask your financier and accountant about the tax benefits available to you.
Lastly, business vehicle finance is flexible, meaning there are various financing options available, and you can choose a repayment schedule that suits your business needs and budget. Most financing options have terms of between 12 months and 5 years, but a finance lease offers more flexibility to trade in your vehicle for a new one or walk away entirely at the end of the lease.