Asset Finance - Commercial Vehicles - Designer Financial Services

Asset Finance Case Study - Repeat Client - Commercial Vehicles

Asset Finance Case Study - Repeat Client - Commercial Vehicles

October 12, 2021

Asset Finance Case Study - Repeat Client - Commercial Vehicles

October 12, 2021

Initial Inquiry

Assist a repeat client purchase three new work vehicles.

The Background

Our client runs a Strata Company, and they were approaching the end of their 36-month term on three work vehicles that we initially financed.

The vehicles cover a significant number of KM’s annually given the number of locations they manage. Each vehicle had already registered over 100,000 km’s on the odometer.

The client asked if we could assist them secured three new Subaru XV’s and arrange the finance for them.

The Solution

Supply of new Subaru’s is limited with either no available models or potentially long wait times for delivery.

Through our dealer network, we secured three new Subaru XV’s for immediate delivery utilising two suppliers.

In addition, we were able to negotiate a great trade-in of the original three work vehicles that covered the full Balloon Payment of their existing contracts.

The financed was arranged at a rate of 2.99% over a 60 Month Term with no balloon.

The Outcome

  • Demonstrates the critical role the Asset Finance specialist’s advice plays in understanding a business, how it utilises an asset & the need to structure the repayment schedule to an assets expected end of the term value.
  • Clients often seek to minimise loan repayments by adding a balloon payment without understanding future asset value, which creates a payout shortfall known as negative equity.
  • Setting up the initial contracts with the appropriate structure three years ago meant we could trade in the existing vehicles for an amount that paid the Balloon Payments in full. (No negative equity despite high km’s travelled)
  • We coordinated the immediate delivery of the three vehicles, from our suppliers to the clients three separate work locations in NSW, as a part of the service.
  • The new finance contract has an appropriate structure for the assets expected end value.
  • We have a very happy client that will provide us with repeat business and advocate our services.

The Client Feedback

For Eoin Costigan who sourced new vehicles, arranged the finance and trade-In’s:

“Eoin has now handled the financing on five vehicles for me over the past few years and his service and guidance is outstanding. Not a problem with any stage of the process, Strongly recommend Designer Financial Services”

Image author: Jfern Visions

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Designer Financial Services - Our Journey

Designer Financial Services - Our Journey

Designer Financial Services - Our Journey

December 22, 2020

Designer Financial Services - Our Journey

December 22, 2020

About us

We are a specialist finance broking firm passionate about supporting Small-to Medium-Enterprises (SME) business owners with tailored finance solutions to run and grow successful businesses.

Why are we Passionate about Supporting SME Businesses.

In Australia, SME’s represent approximately 57% of the Country’s GDP and employ circa 7-8 million people in the overall workforce.

Yet, when it comes to arranging finance for an SME or start-up, it has never been more difficult to get finance approved. Even more importantly, SME’s don’t know whom to turn to as a trusted advisor when they need advice about their finance requirements.

The COVID-19 Global Pandemic has made things even more precarious and uncertain for SME’s in Australia.  Now more than ever, they need Industry Specialists to advise and guide them with tailored finance options for their unique business and their current circumstances.

SME’s are the backbone of the Australian economy, and it is for this specific reason, we are passionate about supporting them with their plans to grow and employ people.

From Sole Operator to an Award-Winning Team

Just over two years ago, I joined my friend Harry Scott the founder of Designer Financial Services to rebrand and grow a Specialist SME Finance Broking Firm.

The following quote cemented our thinking about how DFS will build the business:

“Small business owners are now loyal to people, not brands, and businesses owners don’t care what colour their debit & credit cards are”

The quote came from an industry expert and friend David Muir, a business banker with several large Institutions. Like us, he felt that banks had allowed their teams to become generalists rather than specialists and then asked them to sell multiple products and services to a portfolio of clients. The company frequently moved them from portfolio to portfolio, so they did not get close to the clients to create that unique trusting relationship.

How on earth does an SME business owner build a trusted working partnership with a revolving door of bankers, or worse have to call the centralised phone number because they are not big enough to qualify for a dedicated banker anymore.

Harry Scott and I had already agreed that DFS would build a Team of Industry Specialists in Asset Finance, Commercial Lending, Invoice Finance and broader services such as Car Buying and this quote cemented the idea that we were on the right track.

It was essential to build a team, to look after any SME irrespective of their size, and we needed to earn the right to look after their business.

In building a team, we looked for three core attributes in people:

  1. Integrity & Client focus
  2. They had a specific specialisation in a lending product or service category.
  3. They want to be in a Team of like-minded specialists and not on their own!

Our team has now grown to Incorporate, five Asset Finance Brokers, three Commercial Brokers, an Invoice Finance Specialist, Three Vehicle Procurement Specialists, a Vehicle Fit-Out Partnership and Marketing Manager.

We have been given tremendous support from direct clients plus the finance and accounting industry through:

  1. Numerous valued clients and trusted referral partnerships.
  2. Team member recognition at the State & National Level with multiple awards within our first two years.
  3. Most importantly received 116 five-star Google reviews from our valued Clients.

To date, as an SME ourselves, we have relied MAINLY on word-of-mouth referrals to grow our own business.

But we are in a position to grow significantly to support more SME Clients and referral Partners with the finance they need to rebuild and grow their businesses and the Australian economy.

David O’Toole
Managing Director

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Designer Financial Services prides itself on providing trusted advice, expertise & service to clients looking to Buy, Sell & Finance vehicles

Don't Let Emotion's Control Your Vehicle Purchase

Don't Let Emotion's Control Your Vehicle Purchase

November 23, 2020

Don't Let Emotion's Control Your Vehicle Purchase

November 23, 2020

Don’t let the emotion of buying your new vehicle blind you to Dealer attempts to arbitrage your Purchase & Trade-In prices!

Used motor vehicles in Australia have experienced a surge in values recently & our Team have seen several examples of Dealers attempting to arbitrage clients purchasing & trading in vehicles.

Actual Example
A prospective client purchasing a VW was quoted the following:

Purchase Price $50,000
Trade-In Price $30,000
Net amount payable $20,000

Initially, they thought this was a good deal until they learnt their finance payout figure was $37,000!

At this point, the client contacted our Team to re-negotiate the transaction.

New Client Outcome:
Purchase Price $46,500 (a further 7% discount)
Trade-In Price $37,000 (a 23% trade-in increase)
Net payable $9,500

That is $10,500 in our clients pocket, not the dealers!

This highlights that clients don’t always know what a good deal is. Just as the Mortgage Industry does our Team prides itself on providing trusted advice, expertise & service to clients looking to Buy, Sell & Finance vehicles.

So, If you are looking at purchasing & financing a new vehicle, please reach out to us.

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Industry Update

Industry Update

November 9, 2020

Industry Update

November 9, 2020

The banks and financial institutions are being more cautious with the types of industries and assets they are willing to finance. A lot of the streamline or low-doc policies (no financial applications for business owners) have been reduced or completely withdrawn, and the majority of applications are being assessed with full financials, recent bank statements, and BAS Statements (to confirm trading).

Recently funded assets

Here is a list of assets that Designer Financial Services (DFS) has been financing recently, the introduction of these assets to our clients has undoubtedly helped grow their businesses during this difficult time:

  • Utes & other trade-specific vehicles – for Electricians, Plumbers, Air Conditioning Professionals, and other industry trades
  • Excavators – (Civil & Infrastructure & Landscaping work) – The lenders are making it challenging; however, if there is government contract work or other work sources for the machine, they will lend to the right profile.
  • Lawn Mowing equipment (Landscapers, Civil & Infrastructure work).
  • Truck & Trailers (Civil & Infrastructure work)
  • Plumbing equipment (Jet Blasters & Sewer Cameras) this sort of equipment is very affordable and the earning potential for a plumbing business can be astronomical (we have a number of plumbers who have had proven success with adding these assets into their business).

The increase and extension of the ATO Instant asset write-off

With the ATO increasing the Instant asset write-off from $30k to $150k (Extended until the 31st of December 2020) we have started to see several clients needing to purchase the following types of assets & equipment:

  • Vehicles – Utes, Trucks, Water Trucks, Trailers and Industry-specific vehicles
  • Yellow Goods
  • Excavators
  • Construction equipment
  • CNC Machines
  • Piling rigs
  • Cranes
  • Manufacturing equipment
  • Printing Machinery

A lot of these assets are being purchased due to the amount of infrastructure work the government is fast-tracking for projects across Australia. This means that there is work up for grabs and contracts available and purchasing of these types of assets are required to complete these projects.

It is, therefore, a good time for customers to purchase assets, which will help grow their business turnover. Additionally, the interest rates offered by the financial institutions we introduce applicants to have never been lower.

If you have any client scenarios that you would like to speak about, please feel free to reach out on any of the details above, we will do our best to get the right finance package in place for you or your clients.

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Custom Fit Hyundai iLoad - Tradie Deal of the Month

Tradie Deal of the Month - Custom Fit iLoad!

Tradie Deal of the Month
Custom Fit iLoad!

May 8, 2020

Tradie Deal of the Month Custom Fit iLoad!

May 8, 2020

The Hyundai iLoad van is the vehicle of choice for tradesman, looking for a feature-packed, comfortable, reliable vehicle to ensure they get to the job site on time and be able to carry all the right tools and materials safely. With your choice of variant, whether it be automatic or manual, liftback or twin swing rear barn doors, 3 or 6 seat configurations, there is a model for everyone!

With the enormous cargo space and dual sliding side doors, the customisation possibilities are limited only by your imagination!

We have been able to secure multiple iLoads for our clients, saving them thousands of dollars in the process, and if you are an ABN holder, the discounts are even bigger!

Recently we arranged this Custom Fit Electricians iLoan Van that included:

  • The procurement of this beautiful Hyundai iLoad in Timeless Black with a $7,500 discount on the Vans RRP.
  • A significant discount on Electricians Custom Fit-Out from our preferred partner, Caddy Storage.
  • We Financed the total cost of $47,000.00 for the Van & Custom Fit-Out with no deposit.
  • A brilliant rate on finance with the first payment a month after the vehicle delivery.

Our Designer Vehicle Solutions Team can arrange Trade Specific Fit-Outs and Vehicle Models for anything you can think of.

Coming into May, there will be some exceptional deals in the market, so now is the time to grab yourself an absolute bargain!

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DFS Stimulus Package - Instant Asset Write-off Increase (IAWO)

Instant Asset Write-off Increase (IAWO)

Instant Asset Write-off Increase (IAWO)

April 17, 2020

Instant Asset Write-off Increase (IAWO)

April 17, 2020

The Government is increasing the instant asset write-off threshold from $30,000 to $150,000. It is also expanding access to the scheme to include businesses with an aggregated annual turnover of less than $500 million (up from $50 million).

Since the Government’s announcement we have received numerous enquires about the $150k instant- asset-write-off, and rightly so.

The Federal Government’s increase to the instant asset write-off threshold presents a significant opportunity for businesses, encouraging them to bring forward any planned (or unplanned) capital spending.

What is changing?

The instant asset write-off threshold is being increased 5-fold from $30,000 to $150,000, on a per asset basis.

The business eligibility criteria for the instant write-off has been expanded from those with an annual turnover of up to $50 million to include businesses with annual turnover up to $500 million.
The changes are in immediate effect – as of 13 March 2020, and will end on 30 June 2020.

What is classified as an eligible asset?

An immediate deduction can be claimed on any depreciable asset purchased either new or second-hand for your business, such as:

  • Yellow goods
  • Manufacturing Machinery
  • Plant and machinery
  • Motor vehicles.
  • Computers, laptops and tablets
  • Office furniture and equipment

Importantly, under the instant asset write-off rules, the asset must not only be purchased but have been either used or installed ready for use in the year it is intended to be claimed.

What is claimable?

Asset purchases need to be made by 30 June 2020 by the entity intending to make a claim. The write-off is available for multiple assets, as long as each asset’s purchase price is less than the $150,000 threshold.

To ensure an asset’s purchase price is below the $150,000 threshold, it is essential to know what the tax office defines as an asset’s cost.

According to the ATO, “The cost of an asset includes both the amount you paid for it and any additional amounts you spent on transporting and installing it ready for use. The cost also includes amounts you spent on improving the asset”.In calculating the claimable amount, any proportion of the asset’s use that is for personal reasons must be subtracted. I.e., If 20% of a motor vehicle’s use is for private purposes, 80% of the purchase price is classified as the taxable purpose proportion of the asset and is considered tax-deductible, under the stimulus package.

Only assets with a gross cost up to the $150,000 threshold are eligible. For example, a $200,000 vehicle used 75% for business purposes would not be eligible.

Can Businesses Finance The Asset?

Yes! Businesses can finance the purchase of assets by way of loan, chattel mortgage or finance lease.

If you are considering funding the asset, please contact us to ensure appropriate funding is secured, as certain lease types (operating leases) do not transfer ownership to the lessee and may impact eligibility for the instant asset write-off!

Additionally, Assets purchased from overseas are also eligible to be financed under the IAWO criteria.

Is GST included or excluded in the threshold limit?

Whether the threshold is GST exclusive or inclusive will depend on your GST status.

If a business is registered for GST, the instant asset write-off threshold is exclusive of any GST.

If a business is not registered for GST, the instant asset write-off threshold is inclusive of any GST.

Timing

Eligible assets can be written off in the year they are first used or installed ready-for-use. Given the short window increasing the instant asset write off ($150,000) and eligible businesses ($500M revenue), this must happen before 30 June. At this stage, it is intended that from 1 July 2020, the programme will revert to $30,000 per asset for small business entities only.

That means that for all assets purchased before 30 June 2020, the full cost will be wholly deductible in the business’s 2019/20 tax return, rather than being depreciated over numerous financial periods bringing forward a significant cash benefit.

Finally

These are indeed trying (and unprecedented) times for many businesses, families and our broader community. We are here to help, so if we can be of any support to your clients in the time of need, please don’t hesitate to call or email me directly.

Government Fact Sheet

COVID-19 Government Support Initiatives

DFS is open for business
COVID-19 Government
Support Initiatives

March 30, 2020

DFS is open for business COVID-19 Government Support Initiatives

March 30, 2020

The team at DFS is still open for business and here to provide guidance and assistance to you, your friends, family or your clients during this challenging time.

The Government has announced a raft of stimulus and support packages to be made available to businesses and individuals, and there has been a lot of media coverage on how the banks can assist clients during this challenging time.

Some of the support available includes:

  • Deferral of Asset Finance, Business & Mortgage repayments for up to six months.
  • SME Business Loans of up to $250,000 for working capital.
  • Instant Asset Write-Off increase to $150,000 (IAWO)
  • Interest rate reductions and specials.

However, each lender will have different policies, procedures and contact methods for businesses and individuals seeking support and relief.

Find out more