New England Credit Union Ltd

The concept of novated leasing is central to salary packaging arrangements between an employee and an employer. Under a salary packaging arrangement, an employee agrees to forego a portion of their salary or wages in return for vehicle benefits equal to that amount.

A Novated Lease is a three-way agreement between the Financier, the Employee and the Employer. The Employee leases the vehicle directly from Financier, the Employer agrees to make all payments via a Novated Deed through the Employee’s salary packaging.

Fully Maintained Novated
A fully maintained Novated Lease is an agreement where all of the operating costs (such as lease rental, servicing and maintenance, registration, tyres and insurance) of the motor vehicle are covered by a single monthly payment made by the lessee.

Non Maintained Novated Lease
Under a Non-Maintained Novated Lease the lessee is responsible for all maintenance and other running costs of the motor vehicle.

Employee's benefits:
- Allows employee to salary package
- Choice of vehicles
- Choice of terms 12- 60 months
- Enables use of their pre-tax income for vehicle lease and operating expense
- Option to purchase vehicle at end of lease

Employer's benefits:
- Fleet is off the balance sheet
- Increased borrowing ratio
- No vehicle liability if employee leaves
- Taxation benefits on tax deductible expenses
- Value added incentive for employee retention

Taxation Benefits
Novated lease and running costs of the motor vehicle, and fringe benefits tax (if applicable) are deducted from the employee's pre-tax salary, and PAYG is calculated on the reduced salary or wages.

The tax benefit of a novated lease arises from the concessional fringe benefits tax treatment on the vehicle. Depending on the employee's individual financial circumstances, salary packaging a motor vehicle under a novated lease can have the effect of increasing an employee's net disposal income.

What next?
If you are happy to proceed with Asset Leasing and Finance, or you may have some questions, the first steps are to organise your quotes and finance pre-approval. This can be done over the telephone taking as little as ten minutes.

Once we have established the best finance solution, and you want to proceed, the standard finance process usually follows:

- Application
- Asset procurement / sourcing / ordering
- Documentation preparation
- Settlement
- Asset Delivery

To give yourself the best chance of getting finance approval, we recommend that you deal with one finance company at a time to avoid unnecessary activity on your credit file. Our quotes and pre- approval service is obligation free and you are not committed to us in any way until you decide to proceed.

Finance Lease

Leasing is a sensible approach for any business or individual if the asset is used predominantly for business purposes. A Finance Lease gives you immediate use of the asset without having to arrange a large deposit. Rentals are fixed for the term of the lease, providing security for your financial planning. For added flexibility at the end of the term you have the option to refinance, sell or purchase the asset for the residual value.

Consider these benefits:
- Where the asset is used for business purposes, the lease rental will be tax deductible, the extent of the tax deductibility will depend on the percentage of business use.
- Lease payment is made from pre-tax income.
- Fixed lease payments make budgeting easier.
- Monthly payments are based on the original cost less the residual value of the asset
- Terms are from 12 months to 60 months to meet your individual requirements.
- No or little capital outlay

What next?
If you are happy to proceed with Asset Leasing and Finance, or you may have some questions, the first steps are to organise your quotes and finance pre-approval. This can be done over the telephone taking as little as ten minutes.

Once we have established the best finance solution, and you want to proceed, the standard finance process usually follows:

- Application
- Asset procurement / sourcing / ordering
- Documentation preparation
- Settlement
- Asset Delivery

To give yourself the best chance of getting finance approval, we recommend that you deal with one finance company at a time to avoid unnecessary activity on your credit file. Our quotes and pre- approval service is obligation free and you are not committed to us in any way until you decide to proceed.

Chattel Mortgage

Chattel Mortgage is a sensible approach for any business or individual that needs to either upgrade or acquire a new or used asset. This is a fixed loan that provides for the purchase of an asset in exchange for a series of payments. The asset is used for security.

Flexibility is an attractive feature of a chattel mortgage. You can choose to finance the total purchase price, use a deposit or trade-in or add a final lump sum balloon payment to reduce the loan repayments. You can even use the GST refund to contribute towards paying off the loan, thereby reducing the amount financed and the interest paid over the term of the loan.

By choosing a chattel mortgage, you become owner of the asset while the financier secures a charge over the asset. As you are the owner you may claim a tax deduction for the depreciation on the asset as well as the interest component of the loan repayments

Consider these benefits:
- Minimum capital outlay
- Title is always with client
- Repayments are flexible
- Balloon payments available
- The repayments are exempt from GST
- Flexible terms from 12 months to 60 months to match your individual requirements

What can you finance with Chattel Mortgage?
You can finance any new or used vehicle, plant and equipment of reasonable age and condition. The amount financed can also include your on-road charges and Insurance.

What next?
If you are happy to proceed with Asset Leasing and Finance, or you may have some questions, the first steps are to organise your quotes and finance pre-approval. This can be done over the telephone taking as little as ten minutes.
Once we have established the best finance solution, and you want to proceed, the standard finance process usually follows:

- Application
- Asset procurement / sourcing / ordering
- Documentation preparation
- Settlement
- Asset Delivery

To give yourself the best chance of getting finance approval, we recommend that you deal with one finance company at a time to avoid unnecessary activity on your credit file. Our quotes and pre- approval service is obligation free and you are not committed to us in any way until you decide to proceed.

Commercial Hire Purchase is a sensible approach for any business or individual that needs to either upgrade or acquire a new or used asset. Regular payments are made over the term you choose. Full ownership of the asset is transferred to you when all the payments have been made.

Flexibility is an attractive feature of Commercial Hire Purchase. You can choose to finance the total purchase price, use a deposit or trade-in or add a final lump sum balloon payment to reduce the loan repayments.

Under a Commercial Hire Purchase agreement you do not become owner of the asset until all monies owed under the agreement are paid. However, you can still claim a tax deduction for the depreciation on the asset as well as the interest component of the loan repayments where the asset is used for business related purposes. In addition, GST is not payable on the Commercial Hire Purchase repayments.

Consider these benefits:
- The repayments are fixed over the term of the Commercial Hire Purchase
- You can structure the repayments with or without a balloon
- Minimum capital outlay
- Repayments are flexible
- The repayments are exempt from GST
- Flexible terms from 12 months to 60 months to match your individual requirements

What can you finance with Commercial Hire Purchase?
You can finance any asset new or used vehicle, plant and equipment of reasonable age and condition. The amount financed can also include your on-road charges and Insurance.

What next?
If you are happy to proceed with Asset Leasing and Finance, or you may have some questions, the first steps are to organise your quotes and finance pre-approval. This can be done over the telephone taking as little as ten minutes.

Once we have established the best finance solution, and you want to proceed, the standard finance process usually follows:

- Application
- Asset procurement / sourcing / ordering
- Documentation preparation
- Settlement
- Asset Delivery

To give yourself the best chance of getting finance approval, we recommend that you deal with one finance company at a time to avoid unnecessary activity on your credit file. Our quotes and pre- approval service is obligation free and you are not committed to us in any way until you decide to proceed.

A Consumer Loan is designed for individuals who want to use their car mainly for private purposes, and for whom private ownership is important, ALF offers loans with or without balloon payments.

By utilising a balloon value you can reduce your payments considerably and improve your cash flow.

You can structure the monthly installments to suit individual budgetary requirements. By opting to place a deposit, or by nominating a final lump sum payment at the end of the finance term, you can conveniently decrease your monthly repayments, giving you greater security when managing your budget and planning your financial commitments.

Ownership is transferred to you as soon as the first payment is made, in exchange for security over the vehicle. This is discharged upon payment of the final installment.

You may also be given the opportunity to re-finance your final lump sum payment at the end of the contract term.

Financing your car is only part of the process. ALF can tailor a fleet management program for a single car or an entire vehicle fleet. ALF will calculate, and fully itemise your vehicle budgets, and will put a program in place for all servicing, tyres, fuel and registration.

ALF has access to national service networks and offers you the convenience of managing your fleet with a single card.

Mini (short-term) Lease

If your business requires a vehicle for a period of less than a year, a mini-lease is ideal. A fixed monthly rental covers all vehicle expenses, including servicing, and insurance. A fuel card may also be provided if required. A mini lease can be from between 3 and 12 months, and can be shortened or extended if your needs change. A mini lease is ideal for contract staff.

This option provides several advantages, particularly for public companies, schools and government bodies. An operating lease is a type of lease in which the financier retains ownership of the leased equipment. Under an operating lease there is no predetermined "residual" value to pay as ownership does not automatically pass to the customer at the end of the term.

Operating leases are not listed on the company's balance sheet. Being "off balance sheet" is considered a major advantage over finance leases, particularly for public companies, which may have borrowing restrictions.

By not having to list the operating lease on the balance sheet the company's debt to equity ratios are not adversely affected by using the equipment for a set period of time.

For high technology equipment, which usually becomes obsolete over the term of the lease, the risk of ownership is removed as the customer can hand back the equipment and upgrade.

Under the operating lease/rental option, the customer has more flexibility at the end of the term, as they may:

offer to purchase the equipment at fair market value

How do I apply?

Simply call 132 067 or drop into any branch to discuss your financial requirements with one or our commercial loans specialist.

Disclaimer

“SGE Financial Services Pty Ltd ABN 67 115 276 447 (“SGE Financial Services”) is a subsidiary of SGE Credit Union Limited ABN 72 087 650 637 (“SGE Credit Union”). SGE Financial Services is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). The obligations of SGE Financial Services do not represent deposits or other liabilities of SGECU and SGECU does not in any way guarantee or otherwise provide assurance in respect of the obligations of SGE Financial Services”.