Asset Purchases is the right option for you especially if you’re considering owning equipment and vehicles outright. Asset purchase allows you to purchase equipment and vehicles of your choice by committing to regular payments over a period of time anywhere from 1 to 5 years. Once you make the final payment you own the equipment or vehicle outright.
The benefits of asset purchases:
- There is no establishment fees or loan approval.
- Your tax is reduced by simply claiming depreciation and interest charges.
- With fixed payments you can accurately manage your budget which protects you against interest fluctuations.
- You can structure payments in order to properly suit your business’s cash flow.
- Your business will retain its cash reserves which can be used in the event you need money urgently or you can invest it to earn more money.
- Equity in your business equipment can be built.
- Once you make the final payment towards the closing of the term you are the outright owner of your equipment.
- A large lump sum payment can also be made to quickly pay off the debt.
- While you do not have to make a deposit in most cases making one will ensure lower repayments and a shorter term plus a lower interest rate.
- You can claim ‘Tax Input Credit’ because the GST only applies to your purchase price.
- Your asset purchase will not restrict your current bank credit lines.