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Asset Finance
Finance solutions to support the continuous productivity of your assets and infrastructure.
Continual and rapid changes in technology mean an asset made tomorrow may be five times more powerful than one created today. A funding approach that allows your business to keep up with this change is required to grow and maintain a competitive advantage. At Maia Financial, our asset finance solutions provide the support you need to effectively fund and manage specialised assets and infrastructure.
Hire Purchase
An asset finance product which transfers ownership at the end of the agreement
A hire purchase agreement is an asset finance product that transfers ownership of the equipment from the lessor to the lessee, once the final payment has been made. Interest and depreciation are tax deductible and GST can be claimed up-front.
A hire purchase product is commonly used to:
- utilise a tax deductible asset finance product;
- smooth cash flow by agreeing to set payments over a specified period;
- own the asset at the end of the agreement.
Operating Lease
An off-balance sheet asset finance product
An operating lease is an asset finance product with an off-balance sheet structure. The agreement is structured between two and five years and longer periods are possible. As with a rental product, businesses generally have three options at the end of the agreement:
- return the equipment;
- upgrade the equipment; or
- extend the agreement.
An operating lease is commonly used to:
- utilise a tax deductible and off balance sheet asset finance product;
- use OpEx rather than CapEx to fund equipment use;
- avoid technology and asset risk;
- smooth cash flow by agreeing to set payments over a specified period;
- incorporate servicing and disposal costs into their agreed cash outlays.
Like a rental product, an operating lease can also offer operational flexibility by allowing the business to add or upgrade assets during the agreed period.
Important note: AASB16 the new accounting standard for leases, which makes significant changes to the way lease arrangements are accounted for, is applicable to annual reporting periods beginning on or after 1 January 2019.
The standard will impact the treatment of operating leases. To find out about the pending changes, read our article: AASB 16: A critical change to financing growth.
Rental
A pay-for-use asset finance product
A rental agreement is a pay-for-use asset finance product that is structured between two and five years. At the end of the agreement, businesses generally have three options:
- return the equipment;
- upgrade the equipment; or
- extend the agreement.
A rental product is commonly used to:
- avoid technology and asset risk;
- use OpEx rather than CapEx to fund equipment;
- smooth cash flow by agreeing to set payments over a specified period;
- incorporate servicing and disposal costs into their agreed cash outlays.
A rental product can also offer operational flexibility by allowing the business to add or upgrade assets during the agreed period.
Finance Lease
An asset finance product for long-life equipment
A finance lease is generally used to fund long-life equipment, or when a business wants a possible ownership option with a defined cost at the end of an agreement.
A finance lease is commonly used to:
- utilise a tax deductible asset finance product;
- smooth cash flow by agreeing to set payments over a specified period;
- consider ownership at the end of the agreement;
- incorporate servicing and disposal costs into their agreed cash outlays.
Chattel Mortgage
An asset finance product that offers ownership from the outset
A chattel mortgage or secured loan, provides ownership of the asset for the purchasing business from the outset. The entity providing the chattel mortgage will have a security interest in the equipment.
A chattel mortgage is commonly used to:
- own the asset and avoid a balloon or residual payment;
- smooth cash flow by agreeing to set payments over a specified period.
Sale and Rent Back
An asset finance product that provides a cash injection for your business
A sale and rent back transfers ownership of an asset to the lessor and establishes a regular payment structure to use the asset. The transfer of ownership provides a cash injection for the business and establishes payments over the agreement period.
The product can be structured using a rental, operating lease or finance lease.
At the end of the agreement, businesses have three options:
- return the equipment;
- upgrade the equipment; or
- extend the agreement.
A sale and rent back is commonly used to:
- smooth cash flow by agreeing to set payments over a specified period;
- incorporate servicing and disposal costs into their agreed cash outlays.
Asset Lifecycle Management
A best practice lifecycle management solution
Asset lifecycle management is the process of optimising the profit generated by business assets throughout their life. Achieving this is often a challenge as it’s not a core competency of the operation.
Maia Financial can support your business to achieve best practice via the outsourced lifecycle management solution, which can include:
- account management reviews;
- asset tagging and management;
- staging;
- installation and deployment;
- decommissioning services;
- packing and logistics; and
- recycling or environmentally friendly disposal.
Regardless of the components a business desires to outsource, Maia Financial will ensure all activities are compliant with data security, environmental and industry regulations.
