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Equipment Finance – EOFY Deductions Await!

As the end of financial year (EOFY) approaches, Australian business owners are presented with a strategic opportunity to enhance their operations and optimise their tax position through equipment finance. Financing new equipment or vehicles is not only a pathway to modernising and increasing the efficiency of your business but can also provide significant tax advantages under the right circumstances. So, if you’re thinking about upgrading your equipment or work vehicles – this could be the ideal time!

The Strategic Timing for EOFY Purchases

Investing in new equipment or vehicles as the financial year draws to a close can be a savvy business move. Doing so allows businesses to take advantage of the immediate depreciation deductions available for new assets, which can significantly lower taxable income. With 30 June fast approaching, considering how to make the most of these deductions can lead to substantial financial benefits.

The potential tax benefits of financing equipment before EOFY can be significant. For one, the Australian Tax Office (ATO) allows businesses to claim deductions for the business use portion of the depreciation of the asset. Additionally, specific schemes such as the instant asset write-off or temporary full expensing may allow businesses to write off the full cost of the asset immediately, depending on eligibility and the asset’s value. The $20,000 instant asset write-off, due to expire on 1 July 2025, offers an opportunity for business owners to reduce their taxable income, while also adding value and operational capacity. More details on that can be found here.

What can be Purchased with Equipment Finance?

There’s a great variety of business assets that can be purchased via equipment finance facilities, to suit a range of business types and industries. Common assets include:

• Cars or light commercial motor vehicles up to 4.5-ton capacity (up to 5 years old, purchased from a dealer or private seller)
• Trucks, forklifts, scissor lifts, loaders, dozers, scrapers and dump trucks (up to 5 yrs old, purchased from a dealer)
• Tractors, headers, harvesters, pickers and seeders (up to 7 yrs old, purchased from a dealer)

Who Can Benefit from Equipment Finance?

This opportunity is not just for large businesses. Small and medium enterprises stand to gain considerably from timely equipment finance. Whether it’s upgrading to more sophisticated machinery, expanding operational capacity with additional vehicles, or simply replacing outdated equipment, the benefits extend beyond tax deductions to enhancing overall business productivity and competitiveness.

Streamlined Equipment Finance Process

Through the McKinley Plowman Finance team, the process of securing equipment finance can be incredibly efficient. Here’s what we can offer for many loans:

• Quick Approvals and Settlements: Rapid 2-hour approvals and settlements, with an overall turnaround time of just 48 hours from application to settlement. Documentation is typically handled through secure e-signature platforms for convenience and efficiency.
• High Financing Limit: New clients can access up to $150,000 in finance, while some existing Bank clients can access up to $250,000, for purchasing new business equipment or vehicles. Please note this depends on your current Bank.
• Flexible Asset Options: Finance is available for a wide range of equipment and vehicles.
• Eligibility Requirements: To be eligible, businesses must have held their ABN for at least 2 years, be GST registered, and the finance must be intended for business use only. Importantly, applicants should have no adverse credit history (business and directors).
• Competitive Pricing: Excellent pricing is available, with no financials required for this streamlined process. Many loans we can access for clients also come with no monthly fees and no Dealer origination fee.

Even if you and your business don’t quite satisfy all above criteria for the streamlined process, we can still assist through the normal application process and unlock the pre-EOFY tax advantages of equipment finance.

Equipment Finance for Your Business

Equipment finance offers a dual advantage as EOFY approaches: the immediate enhancement of your business’s operational capacity and potential tax savings that can improve your bottom line. As always, time is of the essence here – with the streamlined processes available through the finance team here at McKinley Plowman, acquiring new equipment or vehicles is not only feasible but also strategically sound. What’s more, our access to specialist lenders means we can assist with a variety of lending needs that major banks might otherwise turn down.

Take action now to ensure your business is well-placed for the upcoming financial year, by contacting us via our website or on 08 9301 2200.

written by:

Paul Moran

Paul has over 35 years of experience in finding financial solutions for homebuyers, investors and business owners.
A licensed broker and member of the Mortgage & Finance Association of Australia (MFAA), Paul’s extensive experience includes 20 years with a major bank, seven of which were as commercial banking manager.
Paul delivers a holistic financial solutions to achieve the best possible outcome for a client’s personal or commercial lending needs. Paul also provides a comprehensive financial consultancy to business owners on commercial, equipment and invoice finance.