lease_link_business_finance

Surrendering Your Lease

oink@littlepigconsulting.com (Oink LPC) — Tue, 07 Feb 2023 05:21:17 GMT

Sometimes, you simply cannot continue with your lease. Most commonly this is caused by going out of business, but any number of things could occur. Once you have surrendered your lease, the lessor re-takes possession of their property.

During this highly stressful time, it’s best to know all of your rights and responsibilities. Read on, to learn the ins and outs of surrendering a lease.

First, Negotiate

One cannot simply decide they’re no longer going to pay their lease; your lessor would generally have the legal right to then recover from you all payments owed until the end of the lease as well as other costs, such as legal fees or interest.

Before you surrender a lease, the lessor must agree to the terms of the surrender. The terms are laid out by the lessor and will differ depending on the situation, but do know that the lessor is under no obligation to agree to any terms of surrender

When negotiating a surrender, it is imperative to have clear and constructive communication between parties. In such a stressful situation, it is sometimes better to have an agent or lawyer to handle the surrender in your stead.

Pay the Surrender Fee

Almost always, a lessor will ask for a lump sum of money to compensate for them losing their expected revenue stream. This sum will certainly be far less than the cost of having to pay off the rest of your lease but it can sometimes be pricey in the short term.

The surrender fee also covers the cost the lessor might incur in finding a new lessee (such as the cost of advertising). At times, the payment may not be enough and the lessor will require you to continue with the lease until the lessor finds a new lessee.

What Happens If Your Lessor Refuses

A lessor is not always open to the idea of surrendering the lease early and they have no legal obligation to. If you break your lease without the lessor agreeing, you will be liable for all payments until the end of the lease period.

However, you can ‘assign’ a lease. To assign a lease is to find another party willing to take over in your stead. In this case, a lessor can only refuse if they have a legitimate reason for doing so, one that is not motivated by some undisclosed reason or ulterior motive.

Are you looking for a lease yourself? Or do you simply need to talk to a leasing expert? Talk to us today.

What to Do Before Applying for a Loan

Fri, 25 Nov 2022 01:19:38 GMT

Applying for a loan can be a stressful and even confusing process. Here are a few things you can do before making your application to have everything run smoothly and increase your chances of being accepted.

Make Sure You Meet the Criteria

Before applying for a loan, you should check whether you are eligible to begin with. No point in doing all the work to put your application together if its going straight in the bin.

Each institution may have its own rules, as will each type of loan. You should talk to your broker about the requirements of your particular loan and look for anything that might disqualify you.

A few that are most common across the board are that the application must:

Be at least 18 years old,
Be an Australian citizen or have the relevant visa,
Be employed and meet the minimum income requirements,
Not be currently bankrupt,
Have a good credit rating.

Know Your Credit History and Maintain a Good Rating

One of the most important things that will contribute to your success in getting a loan is your credit rating. A credit rating informs the lender how reliable you have been in the past for making your repayments. Every time you make a payment on time, whether that's for a loan or simply for your bills, your credit rating can improve. On the other hand, late or missed payments will negatively impact your credit rating.

Before applying for a loan, go over your credit history so you can explain any faults in it to your lender. You can easily get your credit rating through many online sites such as; Equifax , Experian or Illion .

Have Your Financial Statements Ready and Up to Date

Your lender is going to need to see your most recent tax return and tax assessment notice. Other documents such as payslips, bank statements and group certificates will likely also be needed.

Depending on the lender, different documents may be needed, so, before applying, ask the lender for a full list of what's needed so as not to slow the process when you realise you don't have what you need down the road.

Go Over Your Mortgage and Credit Card Statements

Your lender is going to need to see your most recent tax return and tax assessment notice. Other documents such as payslips, bank statements and group certificates will likely also be needed.

Make Sure You Understand the Associated Fees

A very common mistake made by first-time borrowers is applying for a loan without realising there are a number of fees they will have to pay.

We highly recommend asking your lender for a ‘funds-to-complete’ calculation so you are not blindsided by a bunch of payments.

Are you in need of a loan? Talk to a business finance broker who can run you through all the ins and outs.

Your Guide to Renting an Earthmover

oink@littlepigconsulting.com (Oink LPC) — Thu, 20 Oct 2022 05:54:08 GMT

When you’re in the market for an earthmover, the process can be a lot simpler than you might think. There are just a few things you need to do before signing that dotted line.

Make Sure You Have the Correct Qualifications

Luckily, if you are using an earthmover on your own property, no qualifications or certifications are needed to legally operate the machine.

If you are using an earthmover commercially, however, you may need to prove your competence and you will usually be run through a training course by the supplier. Certain states may also require you to obtain your license if you work on a commercial site.

Pick the Right Type

The last thing you want is to have gone through the process of getting yourself an earthmover, only to discover you got the wrong machine for the job.

Sometimes it will be clear which machine to choose, but if you are having any doubts, it is always best to consult an experienced professional. You may even want to bring them on-site to see the job for themselves.

Choose the Right Size

When choosing a machine you may be tempted to choose the biggest one you can afford. After all, if you lease a machine that is too small, it will take far longer to finish the job.

However, think carefully about the job at hand and the terrain it lies on. Is the ground made of mud? A heavier machine may become bogged, and cost you much more time than simply using a smaller, lighter machine. Are there obstacles that the machine needs to move around, such as trees or buildings? A larger machine will be harder to maneuver.

Go to a Trusted Dealer

A good dealer can walk you through the whole process themselves. Their expertise will be invaluable in choosing the right machine. Moreover, you’ll want to make sure you are not only leasing a quality machine but are also being given quality terms.

The terms of a lease cover the time period you will hold the asset and the cost and frequency of the payments. However, depending on the lease, it may also include additional fees, insurance, securities, collateral and more! The last thing you want is to go to a disreputable dealer and find yourself getting the wrong end of the stick because of something hidden in the fine print.

Try Before You Buy

Leasing is an excellent way to test out a machine before committing to a full purchase. When the duration of your lease ends, you may have the option to buy the machine.

In the market for a new earthmover? Leaselink Business Finance should be your first and last stop when looking for an equipment finance broker.

Why You Might Want to Lease Instead of Buying

Thu, 13 Oct 2022 00:50:55 GMT

Leasing follows the same principle as renting, you pay a fee to the owners of what you are leasing to use it for a period of time. While this means you may never own this item, there are many benefits to leasing that, depending on what you are looking for, gives it an edge over buying outright.

It's Less Expensive in the Short Term

The first reason is the most obvious one, being that it is much cheaper to pay off smaller instalments instead of buying it outright. Rather than having to shell out a giant chunk of change, you will likely have an easier time with the smaller regular payments. It’s true that these payments will add up over time, but if you just need something in the short term, it’s a no-brainer.

Leasing is Still Tax Deductible

If you're considering purchasing for tax reasons, you’re in luck! Leasing equipment for your business is still a completely tax deductible expense.

The Terms Are More Flexible

The terms of a lease are usually far more flexible than that of a loan. When leasing you are given options of your own terms, down payments and purchase options of the lease. You will also be able to end a lease agreement far easier than you will be able to finish paying off a loan.

It's Easier to Upgrade

When leasing, it becomes possible to switch out equipment to suit your needs. What if you buy a machine and then a task arises that it is not suitable for? Do you buy another machine? If you are leasing, you can simply stop using one and switch it out for the other.

On top of that, leasing ensures you always have the most up-to-date equipment available. Upon purchasing a vehicle, it depreciates in value the moment you drive it off the lot, and will only go down from there. By the time you have finished paying it off, it may well be an outdated model worth a mere fraction of what you paid for it. While leasing, however, you can ensure you are always using the best equipment available. Once your leasing term ends on your machine, it will be up to you whether you use it again or swap it out for something more current.

100% Financing is More Readily Availabl e

When taking out a loan, more often than not, banks will only lend a portion of the total cost, usually to a maximum of 80%. When leasing, you are covering 100% of the cost with no extra fees.

Rates Are Fixed

When repaying a loan, the rate at which you repay are usually floating rates that will fluctuate. As the rate changes, so too does your repayments. This can work in your favour when interest rates fall, but you’ll be stuck paying more than you agreed to should they rise.

On the other hand, except in rare circumstances, lease payments are fixed and will not change during the term of your lease.

Far Fewer Extra Costs

When taking out a loan, there are several extra costs involved, including; application fees, monthly fees, annual fees, documentation fees, encumbrance check fees, early repayment fees, late repayment fees, early exit fees and more. It can come to a lot of extra money on top of what you intend to take out.

When leasing, on the other hand, you’ll find that in the cases of small ticket items (under $750,000) there will be far fewer additional costs, if any at all, and these costs are kept to a minimum. In comparison, these extra costs will stay around $200-$300, paid only once. The extra fees associated with a loan can be in the thousands.

In the market for a new machine? Whether you’re looking for a bus, earthmovers or even a plane, Leaselink Business Finance can help you. Contact us today.

What You Should Know About Small Business Loans

Mon, 26 Sep 2022 06:48:06 GMT

Running your own business can be a rocky road, especially when you're just starting out. You need to figure out all things that get a business running, not least of all money.

A business loan can be necessary to fund the start of your business and, for many, can make or break it before it even really begins. So, when you’re looking for a loan, it’s very important you find the right one for you.

Here a few things to think about:

Which Type of Loan?

There are multiple types of loans, each with their benefits and drawbacks. Here are the most common kinds of loan for a sole trader:

Line of Credit - Instead of a lump sum that must be repaid, a line of credit is a certain amount of credit you lender makes available to you to use as needed. Usually, you need only pay interest on the money you take from this line of credit.
Fixed Rate Loan - When you take out a loan, it has a rate at which it builds interest. A fixed rate is set by the lender for a certain period of time (e.g. one year) and during that time the interest rate cannot change.
Variable Rate Loan - A variable rate loan means that the interest rate can be changed by the lender each month, depending on the market. Should the market change, your repayment may go up or down.
Secured Loan - A secured loan requires you to put up an asset you own as collateral, such as your home. Should you fail to repay the money you owe, the lender takes possession of the asset to recoup their losses.
Unsecured Loan - An unsecured loan does not require you to put up anything as collateral.

Interest Rates

When you borrow money, you don’t just pay back the money you borrowed. Over time, the loan accumulates interest, which you also must repay as the price for borrowing this money.

This is perhaps the most important part of taking out a loan as it determines exactly how much you are going to have to pay. It’s crucial to not only learn the interest rate, but how often this rate is calculated. Weekly, bi-weekly or monthly?

Short or Long Term

A short term loan will usually require you to make a full repayment within a few months, whereas a long term loan can last decades.

Shorter loans will require larger payments to pay it all back in time, however this also gives it less time to accumulate interest.

On the other hand, a long term loan will allow for lower repayments but will build up much more interest, significantly increasing the overall amount you pay.

Additional Charges

As well as having to pay the loan back, there will almost always be some additional charges that need paying related to the loan, including:

Application Fees - You will almost always have to be some kind of one-time upfront fee when applying for the loan. This may be a set fee given to all borrowers, or it may be a percentage of the overall loan.
Late-Payment Fees - Should you fail to make a repayment, or pay it back late, you will be charged a late-payment fee.
Early-Payment Fees - Sometimes, there is also an additional charge for making a payment early.
Service Fees - The service fee is paid in compensation for the time and effort made by the lender for keeping a record of payments, principal, interest and the like.
Bounced-Payment Fees - A penalty may be applied each time a repayment is declined as a result of having insufficient funds to pay it back.

Looking for a loan? Want to speak with someone who can take you through all the ins and outs?

What to Think About When Buying an Aircraft

Mon, 12 Sep 2022 06:48:11 GMT

Australia is a country that covers 7.7 million square kilometers, most of which is made up of vast stretches of desert and wilderness. In fact, 40% of Australia is thought to be untouched by man. With nearly the entire population living within an hour from the ocean, air travel is increasingly more common in our Land Down Under, as people are forced to fly coast to coast.

Because of this, more and more companies are purchasing their own aircrafts to use everyday as their employees are forced to cross the great desert plains; be it the largest corporations to the humblest of family-owned.

So when you’re in the market for a new aircraft, here’s what you should know.

The Cost

Naturally, the first thing that someone thinks about when making any major purchase is the cost. When buying an airplane it really isn’t very different from buying a car; all the same questions need answering. What model? New or used? How many kilometers? How does it perform?

The cost can fluctuate wildly depending on the answers to these questions. Today, you can buy a used, single-engine propeller aircraft for as little as $100,000. On the other hand, if you're looking for a business-class jet, that's likely going to cost more than a million.

Finding the Right Model

The trick when buying an airplane is finding exactly what you need; no more, no less. No two are the same; the differences between some are as if comparing a Vespa scooter and a Sherman tank. Before purchasing, think long and hard about how you're going to be using the aircraft.

What distances are you going to be traveling? You’re going to need to make sure your fuel tank is large enough and the aircraft durable enough to travel the distances that you need. For some, that might be to just the next town over. For others, the other side of the country.

How many seats will you need? For every extra seat that you buy, you will not only be paying more on the initial purchase, but also on fuel, maintenance and insurance costs. The premiums on an aircraft can run up to 5% of the replacement cost.

Where will you be landing? Not all aircraft are suited to be landing on non-sealed airstrips. And if you’re landing on water it’s a whole different story entirely.

New or Used?

Just like buying a car, you can save a good amount of money when buying second-hand. Of course, doing so does run a greater risk of purchasing something that isn’t at 100%. That’s why it is important to enlist aid from a specialist dealer or other industry professional to inspect the aircraft for you. The last thing you need is to be in mid-air when you find out the previous owner skimped on the maintenance.

Financing

Now you’ve picked out your dream aircraft, it’s time to buy. If you’re someone who has ever bought a car, boat or any other form of heavy machinery, you’re already familiar with the process of buying an airplane. Though depending on the model of aircraft, it’s likely it may be your most expensive purchase yet.

Unless you’re one of the few who can afford an aircraft out of pocket, you're going to want to get in contact with a finance broker to secure funding for the purchase. You might think that you can’t afford to buy outright and instead you should rent an aircraft instead. This is entirely viable, though only for short term use.

Purchasing almost always works better in the long run, especially considering the ATO allows any company to claim depreciation of an aircraft until it is ten years old. This makes the option of purchasing an aircraft through a chattel mortgage structure far more cost effective than leasing an aircraft for many businesses.

Whether you’re ready to say yes to your dream plane or you’ve only just had the thought, you should get in touch with a business financing organization as soon as possible. Leaslink handles all kinds of types of financing for business, and aircraft financing is one of our specialties.