AskFunding.com.au provides comprehensive information about business loans, car loans, novated leases, equipment financing, and salary sacrifice arrangements across Australia. We help you understand your options with detailed guides covering loan types, interest rates, tax implications, and eligibility requirements.
Important: We are not financial advisors, lenders, or brokers. We provide general information only to help you research your options. Before making any financial decisions, consult with a licensed financial advisor, verify current rates with lenders directly, and check tax information with the ATO. All information on our website is for educational purposes and does not consider your personal circumstances.
A novated lease is a three-party agreement between you, your employer, and a leasing company. Your employer makes lease payments from your pre-tax salary, reducing your taxable income. This arrangement includes the vehicle purchase plus running costs like fuel, insurance, and maintenance.
Tax Savings Example: If you earn $80,000 per year and lease a $40,000 car, you could save $8,000-$12,000 over a 5-year lease term. Someone earning $120,000 could save $12,000-$18,000. Savings come from reduced taxable income, GST savings on the purchase (10% off), and packaging running costs using pre-tax dollars. Your actual savings depend on your tax bracket, vehicle cost, and lease structure. Eligibility requires permanent employment, employer participation, and meeting income thresholds (typically $50,000+ annual salary). Consult a tax professional for personalised calculations.
Car Loans are for purchasing vehicles for personal or business use. You borrow $5,000-$150,000 typically, with interest rates of 5-15% p.a. over 1-7 years. You own the vehicle once the loan is paid off. Secured loans use the car as collateral (better rates), while unsecured loans don't require collateral but have higher rates.
Equipment Financing is specifically for business equipment, machinery, or commercial vehicles. Loan amounts range from $10,000-$500,000+ with terms of 2-10 years depending on equipment type. You can structure it as a loan (you own equipment from day one) or a lease (monthly payments, own at end). Equipment financing offers tax benefits: claim depreciation, GST input credits for registered businesses, and interest deductions. Technology equipment typically has 2-3 year terms, while heavy machinery can be financed for 7-10 years to match its useful life.
Your credit score ranges from 0-1,200 in Australia. Traditional banks typically want 650+, while alternative lenders may accept 550+. Get a free credit report from Equifax, illion, or Experian annually. Fix any errors, pay bills on time for 6+ months before applying, and reduce credit card balances to improve your score. Multiple loan applications within 14 days typically count as one inquiry, but too many applications signal risk to lenders.
A loan advertising 7% interest might actually cost 8.2% when fees are included - that's the comparison rate. Another loan at 7.5% interest with low fees might have a 7.8% comparison rate, making it cheaper overall. Comparison rates include establishment fees, monthly fees, and most ongoing charges. Always check both rates, read the fine print for all fees, and calculate the total cost over your loan term, not just monthly repayments.
Sole traders and self-employed individuals face stricter lending requirements. Prepare 2 years of tax returns with Notice of Assessments from the ATO, business bank statements for 6-12 months, BAS statements, and profit & loss statements. The challenge: many minimise tax (reducing visible income for loans), and income often fluctuates. Consider saving a larger deposit (20-30%), maintain separate business accounts, and choose lenders experienced with self-employed borrowers. Your actual declared income on tax returns matters more than what you claim verbally.
Permanent residents are treated like citizens with full lending access. 457/TSS visa holders can often access car loans and novated leases if employed by Australian companies and the visa covers the loan term. Skilled migration visas (189, 190) are generally accepted. Student visas face significant challenges and may need guarantors. Build Australian credit history with a credit card, save larger deposits (20-30%), and bring credit history from your home country. Check with specialist lenders familiar with visa holder applications.
Australian lenders are required to consider financial hardship requests. They may offer temporary repayment reductions, interest-only periods for 3-6 months, loan term extensions, or repayment pauses. Don't ignore the problem - contact your lender as soon as you realise there's an issue. Get free help from the National Debt Helpline (1800 007 007) for confidential financial counselling. Defaulting severely impacts your credit rating for 5 years and may result in asset repossession for secured loans.
