The preservation of working capital and taxation benefits are two big draw cards for businesses looking to finance staff vehicles.
Companies the world over are often faced with the costly requirement for staff cars. However, with the number of financing options on the rise, many business owners are turning to funding these purchases rather than paying cash.
Financing, rather than buying outright, enables businesses to take advantage of two key benefits: greater control of cash flow and working capital, as well as various tax benefits.
�Preserving working capital is a key benefit for business owners, when comparing financing vehicles against paying cash,� says Sarah Eifermann, SFE Loans Head Honcho.
�A business owner needs to consider whether their working capital is better spent on other aspects of the business, including paying debtors, advertising and marketing or even purchasing more inventory.�
�Some businesses may even be able to invest working capital and achieve a better outcome or rate of return on that money, that exceeds the interest charges associated with financing, thus making it a better choice� added Eifermann.
The taxation benefits associated with financing staff vehicles is another key reason why businesses are turning to financing options. Of course, there are many different types of finance, each offering different tax benefits, as well as the luxury tax threshold to consider, so expert tax advice is strongly recommended.
�In certain circumstances, the financing of business assets provides a business owner with an opportunity to claim various tax deductions, such as rental payments, interest payments and depreciation, thus minimising the amount of tax payable, and this is why a great relationship with your finance broker AND your accountant is a must in business!� says Eifermann.
Going down the financing route can be cost-effective, and with expert advice it can also be pain-free when it comes to paperwork. Eifermann says that some businesses can arrange finance for a vehicle without the need for financial statements, provided they meet certain circumstances.
�With a standard application taking no more than 20 minutes to complete, we see motor vehicle finance as an integral component in providing a holistic, comprehensive service to our customers,� she says �plus we also have relationships with dealers which have been known to save our customers up to $8000 on the purchase of their new vehicle!�
�What�s more, with interest rates at all-time lows, the decision between paying cash and financing business assets should be an easy one.�
SFE Loans can assist you with commercial and equipment finance, making car finance simple.
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