Instant Asset Write-Off
The end of financial year is approaching at an alarming rate. It is now that businesses should be planning to make vehicle and equipment purchases before June 30. These purchases may be eligible for the ATO instant asset write-off. The ATO instant asset write-off is a fantastic incentive for business. However, the current limit of $150,000 is due to end soon. Find out more about the instant asset write-off and how vehicle finance can benefit your business.
End of instant asset write-off
The Australian Taxation Office has been particularly generous by increasing the instant asset write-off from $30,000 to $150,000 during the covid crisis. This generosity is coming to an end on the 30th of June 2021. As such, businesses need to act soon to ensure they do not miss out. This is particularly relevant with the current limit on car stock in Australia!
What is the instant asset write-off?
This government incentive allows eligible businesses to immediately write off the cost of an asset in the year the asset is purchased. There are a few qualifiers. For instance, the asset must be used for business related use. In addition, the asset can be either new or second hand. But best of all, the $150,000 threshold can be used for multiple items. That is, the cost of each asset must be below $150,000.
What can be purchased using the instant asset write-off?
Any depreciating asset can be instantly written off. This includes all types of vehicles. From cars, trucks, farming equipment, to earth moving machinery and mining equipment. Factory equipment and machinery, such as lathes, planers and hoists, are also included. Further more, smaller office items such as computers, and office furniture are claimable. Please note there are some exemptions. For further information please refer to the ATO website.
What next? If you are motivated to take advantage of this incentive then you need to consider the benefits of business vehicle finance.
Benefits of business vehicle finance
Maintain positive cash flow
By financing business vehicles, small businesses can maintain a positive cash flow. Instead of having cash tied up in an asset, it can be put to better use in your business. It also allows businesses to have cash-on-hand for those unexpected expenses. Cash can also be used to invest in income producing assets and machinery.
No doc car loans and low doc car loans are an attractive finance option for small business.
No doc car loans
A no doc car loan facility allows businesses to easily access finance without the need for any proof of income. This type of loan is suitable for established businesses whose owners or directors are asset backed. A signed declaration stating that the business will be able to afford the loan repayments is required. In addition, you will also need to provide photo identification and rates notice as proof of home or investment property ownership. For non-property backed applicants, previous confirmable lending can assist in gaining an approval.
Low doc car loans
Low doc car loans are an extremely popular loan choice for those who are self-employed or who are small business owners. Limited documentation is required to prove income. Documentation may include interim financials, such as in-house profit and loss statement, BAS and/or bank statements. This type of loan negates the need for current tax returns.
The benefits of a no or low doc car loan include:
- Terms up to 7 years;
- Balloon payment option for loan terms less than 5 years;
- Fixed monthly repayments;
- Little to no deposit;
- Competitive interest rates.
GST on the vehicle purchase price can be claimed in your BAS tax return. Further more, any interest paid on the loan is claimable in your annual tax return. As always, please check with your accountant.
How can AAA Finance help your business grow?
AAA Finance will save you time and money!
AAA Finance is an Australian owned small business just like you. We understand the time pressures of running your own business. You are an expert in your industry, just as we are in ours. AAA Finance can take the hassle out of your next business loan. Our motto is ‘quick and easy finance’. We do just that, along with providing AAA customer service. Our staff of highly experience finance brokers take the time to listen to your needs and will get you the best finance deal. We have access to over 40 different lenders. This means we have a lender to suit every type of scenario. Act now to avoid missing out on the instant asset write-off.
Business loan calculator
Our simple to use business loan calculator comes with a balloon payment option. Simply input your loan amount, approximate interest rate and loan term in years. The interest rate is dependent on several factors. These include your credit history, type and age of asset and your individual profile. Each parameter can be modified. This allows business owners to become informed of how adjusting each parameter affects the monthly loan repayment. Knowing your approximate loan repayments allows business owners to plan purchases knowing that they will fit within budget. If you would like a refined quote, this is now possible via our Business Loan calculator page. If you would like to know more about current interest rates, please get in touch on 07 5493 1222.
Pre-approved finance allows you to shop with confidence knowing your funds are approved. A pre-approval is based on a particular asset of a specified year. Once pre-approved you will know exactly what your loan entails. This will include your interest rate and monthly loan repayment amount. The lender will also forward details of any further documentation that may be required.