Discover how business equipment can serve as valuable collateral for financing, providing opportunities to fuel your enterprise’s expansion. Learn about different funding arrangements and their implications for borrowers in terms of taxation and ownership. Get ready to explore the possibilities that await your business as you leverage equipment to unlock its growth potential.
BUSINESS EQUIPMENT
When acquiring or leasing a new physical asset, it can often be used as collateral for financing. The terms of asset finance depend on the asset’s expected useful life and valuation.
Similar to commercial property, credit providers prefer non-specialized assets that can be easily liquidated. Assets purchased from established vendors are considered new and have common usage, making them more attractive to lenders.
There are various funding arrangements available, including
- Finance Leases (Operating, Novated)
- Chattel Mortgage
- Commercial Hire Purchase (CHP)
- Rental Agreements
CONCLUSION
In summary, property security is a vital aspect of lending and borrowing. It safeguards lenders from potential losses and offers borrowers access to favourable credit terms.
Residential and standard commercial properties are preferred choices, while specialized commercial properties carry higher risks. Understanding property security empowers informed financial decisions, benefiting both borrowers and lenders in their pursuit of success.
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Disclaimer:
The information provided in this blog is for educational purposes only and should not be considered financial advice. Always consult with a professional financial advisor or lender for specific lending decisions.
