Vehicles

A Few Benefits of Getting a Loan for Company Vehicles

Don’t use your personal vehicle for business. From delivering products and services to clients to making long road trips to meet with providers that can help you expand your business, the personal cars of small business owners tend to take on quite a workload, especially during the early years of business establishment.

The idea of financing one or several company cars might not be high on the priority list of startup entrepreneurs as other financial considerations are more pressing. However, once a business becomes established and financially stable, financing a fleet of company cars or even company trucks might be a great way to grow your business, attract better employees, and give your own car a needed rest. Below, we look at some of the benefits that can come with vehicle finance.

Car Fringe Benefits

One of the major benefits associated with business car finance is that you can choose which cars to make available for your employees or for diverse work purposes. According to the Australian Taxation Office (ATO), if an employer decides to make a car that they personally own or lease available for the private use of an employee, they may provide a car fringe benefit that comes with several tax benefits. If you think that your company urgently needs a business car, instead of investing in a brand new car, you could potentially purchase a new car for your personal use, and transfer your existing used car to the company. Not only would you personally have a new car for private use, but you might even qualify for certain tax benefits that come with “donating” your existing car.

Competitive Car Lease Interest Rates

Another benefit with purchasing a business car is that there are several lenders on the market. Whereas it can sometimes be difficult to find a small business loan, finding financing for a car finance lease or business car loan is a much more competitive industry and should allow you and your company to find a loan with interest rates and loan terms that work for your company´s particular financial situation. Ebroker is a great website that can help you begin to search and compare several different types of business car interest rates.

Ease of Finding Equipment Finance

A recent report by the Reserve Bank of Australia finds that there are over 2 million small businesses in Australia and a new small business is born every two minutes by a nation of young entrepreneurs. While many of these small businesses will face several challenges during their beginning years, finding equipment finance is most likely not one of the hurdles that they face. In fact, around 40 percent of the country´s equipment finance portfolio goes towards financing fleets of company cars and light commercial vehicles. With this amount of money circulating, even the tiniest of businesses should be able to find a reputable lender willing to help them purchase a company car.

Helps Young Businesses Maintain Liquidity

Another benefit that comes with receiving a business car loan is that it can help your young business to maintain needed liquidity, especially during the early, startup years. Unless the bank surprisingly approved your request for a huge loan to get your business up and running, most small business owners face significant cash flow problems during the startup phase. These limitations can make it close to impossible to purchase a company car outright. By choosing to apply for a business car loan, your company can enjoy the benefits that come with owning a company car while simultaneously spreading out the cost of that vehicle over several years.

Improve Employee Satisfaction

Lastly, purchasing a company car can help you to attract innovative employees that offer talent to help your business grow. Offering the use of a company car is a major employee benefit that will certainly draw the interest of quality employees and allow you to build a team that is trustworthy and committed to helping your business meet its goals.

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