You may need funds for a motor vehicle or equipment. Provida understands that finding the right sources of finance for a company can be complex and will waste your valuable time. Hence, Provida simplifies the borrowing process for you.

Depending on what business you’re in, at some stage you’ll probably need help buying vehicles, earthmoving equipment, trucks, trailers, or other commercial equipment. Borrowing the money for these tools of trade is not only tax deductible, but allows you to keep the cash you’ve got to keep doing business.

Choose from a range of products to suit your requirements:

Chattel mortgage

A chattel mortgage involves a loan which gives your financier a Bill of Sale over the asset being purchased, but gives you ownership of the asset from day one.

With a chattel mortgage:

  • You own the asset immediately when it is purchased
  • The vehicle or equipment being purchased is normally sufficient security for the finance
  • The loan may be for 100% finance or repayments can be reduced by an up-front payment
  • A balloon payment can be built in similarly to a residual value in a lease. This will also have the effect of reducing the repayment
  • Depreciation of the item and the interest paid on the loan are generally tax deductible
  • No GST is payable on individual instalments
  • Can be structured to minimise GST impact, as GST can be claimed as an input credit
  • The interest rate is fixed for the term of the contract

Hire purchase

A hire purchase is an agreement to purchase a vehicle or equipment subject to payment terms, which means you gain equity in the asset with each instalment made.

With a hire purchase:

  • Ownership of the asset is transferred to you once you make the final payment
  • Depreciation of the item and the interest component of the hire purchase are generally tax deductible
  • No deposit is necessary
  • The vehicle or equipment being purchased is normally sufficient security for the finance
  • The loan may be for 100% finance or repayments can be reduced by an up-front payment
  • A balloon payment can be built in similarly to a residual value in a lease. This will also have the effect of reducing the repayments
  • No GST payable on individual instalments
  • Repayments are fixed for the life of the loan, allowing you to plan your cashflow

Lease

Leasing allows you to obtain goods without a capital outlay and then upgrade them at the end of the lease period.

Leasing has GST implications, so check with your accountant or advisor first.

With a lease:

  • No deposit is required
  • You choose the vehicle/equipment
  • A residual value within ATO parameters is agreed on, and has the effect of reducing the monthly instalments
  • The equipment or vehicle being purchased is normally sufficient security for the finance
  • Repayments are fixed for the life of the lease, allowing you to plan your cashflow
  • At the end of the lease, you can return it for sale or trade the item in and lease an upgraded model (you will be liable for any shortfall under the residual value). In practice, it is often possible to pay out the residual value and receive title to the vehicle or equipment

Novated lease

A novated lease is a flexible, convenient way for a salary-packaged employee to lease a vehicle through their employer. After signing a novation agreement, the employer makes lease payments on behalf of the employee. However, the employee remains responsible for the payments during and after employment has ceased.

With a novated lease:

  • The employee has full use of the vehicle
  • In the case of a non-maintained novated lease, payments are made from pre-tax income, but running costs are met by the employee from after-tax income