Energy Assets - how we can fund them.
Energy efficient assets are becoming buzzwords these days, and with the price of energy going up why wouldn’t you look at ways to save on it. More and more finance companies are now offering commercial finance for energy assets, solar panels (including installations costs) and energy efficient lighting, power correction units, battery storage and gas engines to name a few.
They can be financed on a chattel mortgage or a rental product and each product has their own benefits :-
Chattel Mortgage, to own the goods
Your business owns the asset immediately and makes fixed monthly repayment to pay off the loan
At the end of the term after the final payment, clear title to the asset is transferred to your business
Interest and depreciation may be deductible for income tax purposes
If your business is registered for GST you may be entitled to claim input tax credits upfront on the price of the asset.
Term can be from 36 months to 84 months
Rental
Finance Company owns the assets and you rent it from them for an agreed term
At the end of the term you can choose whether to continue renting, return the goods, or make an offer to purchase at an agreed price
Tax advantage via Rent payments being 100% deductible subject to 100% commercial use v’s cash purchase depreciation only (Solar PV Systems are a 20 year write off)
Cash Flow improved avoiding large upfront costs
Repayments are fixed for the term
Some soft costs can be bundled in to Rental finance
Term can be from 36 months to 84 months
Happy to discuss either option with you. Some installation under $35,000 will not require financials but this is not always the case. A quick call to us and we will be able to let you know.
Blog written by Tina Clark, an Equipment Finance Specialist at Laurentide Financial Services.
This information is for general use only and the recipient should seek their own advice in relation to any product or service referred to in this document.
