Five Important Investments Your Business Can Make With Asset Finance
Smart businesses use Asset Finance as a form of investment. They regard their loan not as an expense but an investment in their future profits.
29 July 2021
There are two (2) things a business can do with its money – ‘spend’ it or ‘invest’ it.
Spending is when the return is less than the expense, while investing is when you get back more than you put in.
Smart businesses use Asset Finance as a form of investment. They borrow money to buy assets, and they use those assets to increase improve their bottom line.
In other words, they regard their loan not as an expense but an investment in their future profits.
How to use good debt to grow your business
If you think strategically, Asset and Equipment Finance can help you grow your sales and profits. Here are five important investments your business can make with the right finance facility:
- Plant – investing in new plant could enable you to manufacture more of your existing products at a lower cost and branch out into new products and services.
- Machinery – the more automated you make your business, the better your productivity and quality will be. Improving productivity and quality are the two (2) fastest ways to reduce labour costs, rework and improve your profitability.
- Computer system – a more advanced computer system could make your staff more productive and less error-prone.
- Company car – the more mobile you make your salespeople, the more clients they can visit and the more sales they can generate.
- Truck – if you trade in for a new truck, your new vehicle is likely to be less fuel-hungry and less prone to mechanical problems than your old truck, which will mean lower running costs and less down time.
You might be able to write off your investment
Under temporary full expensing rules, most businesses “can claim an immediate deduction for the business portion of the cost of an asset in the year it is first used or installed ready for use for a taxable purpose,” according to the Australian Taxation office.
Conditions apply. Your business may be eligible for temporary full expensing if it is:
- a business with an aggregated turnover of less than $5 billion
- a corporate tax entity that meets the alternative income test
Speak to your accountant to see if your business qualifies for temporary full expensing.
Want to invest in the next stage of your business’s growth? Vie Financial can help. To discuss your options, fill in this enquiry form or contact us on 1300 400 843.