If 2020 was the year of IAWO what will 2021 hold? From the amount of hi-vis clad ministerial press conferences it could be a massive year for infrastructure projects for a start. Several government measures are also in place to boost the home building sector.
For businesses in construction, earth-moving, mining, general building and trades, manufacturers and processes of building materials, sand and gravel and others with involvement in large-scale projects it could be the year to invest in new equipment.
As a quick reference guide and our own 'assistance package' we present this overview of equipment finance - what offers are in place, what loan products are available, what resources Jade Equipment Finance provides and reminders and updates for your diary.
Equipment and Asset Finance Interest Rates
The first thing most equipment buyers want to know is the interest rate on their finance. We are driven by achieving better interest rates on your equipment loans at all times and 2020 made that even better. In response to the downturn in the Australian economy caused by the coronavirus pandemic, the RBA cut the cash rate a number of times plus introduced additional monetary policy measures. 2020 ended with interest rates at historic lows and the broader financial sector has an expectation that rates will remain low through 2021.
But the RBA will be taking into account the unemployment figures and GDP figures at their monthly board meetings when they consider any rate changes.
A point to note is around fixed interest rates and particularly in regard to Jade equipment loans. We arrange our loans for customers at a fixed interest rate on all our equipment finance products. That rate is established when the loan is initially negotiated by your consultant and remains the same through the entire finance term. So if the RBA does alter the cash rate, your existing equipment finance contract and repayments will not change.
If you have a loan through another lender at a much higher interest rate than is currently available, you may like to talk to us about refinancing.
Equipment Finance Products
Our portfolio of equipment finance products is the same for 2021 with Chattel Mortgage, CHP, Leasing and Rent to Own all available. To compare the interest rates we offer on each type of finance refer to our Loan Comparison chart.
The decision as to which finance product you should select is a discussion you should have with your accountant as it depends on aspects of your specific operation and financial targets. But if you do want to take advantage of accelerated depreciation measures then Chattel Mortgage is the most appropriate.
Tax Deductions and Government Measures
The Instant Asset Write-Off scheme dominated the business lending area in 2020 and for eligible businesses acquiring eligible assets, accelerated depreciation measures continue through to June 2022. Temporary full expensing is available and you can check the criteria and other information at www.ato.gov.au or chat to your accountant.
State governments have introduced grants programs for specific industries and specific businesses so it is worth regularly checking in at your state government COVID-19 support or business support webpage for the latest offers.
Grants are also available through Austrade to cover part of the costs for buyers and exhibitors to attend the Business Truck Show and many other construction equipment field days. This could be handy if you are attending a show in 2021. Check the full list of eligible business events at https://www.austrade.gov.au/
Updated Loan Resources
Jade has always operated a streamlined and convenient loan service with our online and phone based finance services. Through 2020 we expanded our resources for customers with new articles on equipment manufacturers, new products and news on developments in lending and financing regularly posted to our online library for your reference.
Our Equipment Finance Calculator also now has a work mate with the introduction of our Loan Comparison calculator. These finance tools can be used separately or in conjunction with each other to assist you in planning your finance.
Planning Calendar – Essential Dates
- In late 2020 reports appeared in the media of the large number of drivers being fined for driving on an expired licence and driving an unregistered vehicle. Right here and now, place the dates for your essential renewals into a phone alert system! If your equipment requires rego or insurance, you need to ensure it is current. Ditto for any trade licences you may hold.
- JobKeeper ends in March 2021
- The Federal Budget and other state budgets are traditionally brought down in May. Stay tuned for what measures the Treasurer may announce to support your business.
- Field days and expos are hopefully back on the agenda in 2021 after most events were cancelled in 2020 due to COVID-19. Keep an eye on your industry publications for dates and if you plan to buy new equipment at a field day, speak with us first about pre-approved equipment finance.
- June is EOFY and not only tax time but EOFY sale time – watch for big discounts on equipment.
Our team will be staying across news and developments in the financial sector and bringing you updates through our blog articles.
To discuss your equipment finance requirements for 2021, contact Jade Equipment Finance on 1300 000 003
DISCLAIMER: THE CONTENT IN THIS ARTICLE IS PREPARED SOLELY FOR GENERAL INFORMATIONAL PURPOSES. THIS CONTENT IS NOT PROVIDED AS FINANCIAL ADVICE. IF YOU REQUIRE ADVICE AROUND YOUR PERSONAL FINANCIAL SITUATION IT IS RECOMMENDED THAT YOU CONSULT WITH A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED IN REGARD TO ERRORS OR MISREPRESENTATION OF CONTENT AS IT PERTAINS TO GOVERNMENT MEASURES AND POLICIES, PRODUCTS SPECS AND DETAILS AND OTHER DATA AS SOURCE VIA THIRD PARTIES.
