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Frequently Asked Questions

Below you'll find some of our most commonly asked questions and answers. If you don't find the answer you're looking for contact us and we'll be happy to chat to you.

Do you require additional security on an asset finance loan?

In most cases Directors Guarantees are taken and the asset that is subject of the loan is used as security. There is not a requirement for any other form of security.

Am I required to provide a deposit on asset finance loan?

In most cases a deposit is not required on an asset finance loan.  Funding can be provided for 100% of the purchase price and can also include some installation or soft costs.  

I have just established my business. Will I qualify for a loan?

There are many banks and financiers who will require you to have had a registered ABN of at least two years to qualify for a loan.  SME Finance Group are accredited with a range of lenders who specialise in lending to a new business.  Provision of bank statements and a business plan or financial budget process will assist the credit process so your loan can be approved at the earliest possible time.

What information to I need to provide in a credit application

This can depend on the amount and type of asset to be purchased.  Standard requirements include a minimum of two years financial statements a statement of position on the directors/shareholders, cash flow/budgets and of course details of the asset(s) to be purchased.

How long can I finance the asset over?

Generally most vehicle & equipment financiers will provide finance terms of between 12 months to 60 months. For more expensive items that have a longer effective life sometimes up to 10 years is possible.

What is a balloon or residual payment?

A Balloon payment, or also known as a residual payment, is an amount due at the end of the agreed contractual term to finalize the contract. It is commonly utilized to structure a facility whereby the clients require a lower monthly repayment over the contracted term, to assist in managing their cash flow.

With Leases the ATO has clearly defined guidelines as to the Residual Values allowable, particularly on the lower end (as you must have a Residual Value) with a Chattel Mortgage there is more flexibility as you can structure the facility without an end balloon payment. 

What are the types of vehicle and equipment finance?

  1. Finance Lease
  2. Operating Lease (also known as rental)
  3. Chattel Mortgage (also known as a Goods Loan)
  4. Novated Lease

Finance lease

A finance lease provides 100% finance to acquire assets for use in your business. Our finance lease is a rental agreement where the Bank owns the asset and you then lease it for an agreed term and rental amount.


  • Most depreciable assets can be financed
  • Minimum finance lease amount is generally $10,000 over terms that range from one to five years. Lesser amounts & longer terms are sometimes available depending on the goods being financed
  • Interest rate and repayments are fixed for the term of the contract
  • Irregular or seasonal payment schedules can be considered to suit your cash flow

Operating lease / Rental

An operating leases & Rental are agreements between you and the Bank to rent equipment for use in your business for an initial fixed period with options available following that term.
It can be an efficient and cost-effective financing strategy if you are continually upgrading your vehicles and equipment, or if you want to rent rather than own your asset. This is particularly good for high depreciation goods that are tools for the business rather than assets. Eg IT systems, photocopiers & phone systems.


  • Most depreciable assets can be financed
  • Minimum operating lease amounts vary from as low as $2,000 with terms that range generally from one to five years
  • Provides access to the latest equipment and technology without the associated risks of ownership
  • Interest rate and repayments are fixed for the term of the contract

Chattel Mortgage

A Chattel Mortgage (also known as a Goods Loan) is a loan agreement where you borrow funds to acquire an asset. You provide security for the loan by way of a mortgage to the financier over the asset financed.


  • May be used to finance most equipment that generates income
  • Monthly payments can be tailored to suit your cash flow
  • You can borrow 100% or less deposit or trade in
  • Loan can be structured with or without balloons, and with payments in advance or arrears
  • Interest rate and repayments are fixed for the term of the loan

Novated lease

Novated leasing from the financier provides a flexible, portable and convenient way to acquire a motor vehicle as part of an employee’s salary package. Employees lease a motor vehicle of their choice and while they remain employed, their employer agrees to pay the rentals directly from the employee’s gross salary.


  • Terms that range generally from one to five years
  • Interest rate and repayments are fixed for the term of the contract
  • Leases may be structured as either finance lease or operating lease and may include the option of vehicle maintenance and acquisition
  • The lease is portable so employees can take the vehicle with them should they change employers so long as the new employer is agreeable in becoming the replacement sub lessee.

Can I payout earlier?

All financiers will allow either a CHP, Chattel Mortgage or Lease to be paid put earlier than the agreed term however each lender’s policies on how their individual payout formulas are calculated vary from one to the next.

Can I make extra repayments?

Generally speaking this is not advisable as whilst it places the contract in advance of the prescheduled repayments it is unlikely any taxation benefits would be achieved, advance payments can’t be redrawn & there is the risk that if a Direct Debit was in place it may not deduct further payments until the contract once again fell due.

When does my first payment start?

This depends on your cash flow preference. The repayments can be set up as payments in advance, that is the first payment is taken at settlement of the transaction or payments in arrears, which means the 1st payment is due 1 month from date of settlement

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