Horse Float Financing for Businesses: Why a Broker Can Help

For businesses involved in equestrian activities—whether it's horse breeding, training, transport, or event management—investing in a horse float is a necessary expense. Not only does a horse float ensure the safe transport of animals, but it also plays a key role in the day-to-day operations of many equine businesses in Australia. When it comes to financing this essential asset, understanding your options and navigating the loan process can be daunting. While you might consider applying directly with banks, using a finance broker can provide you with significant advantages tailored to your business’s needs.

Business Financing Options for Horse Floats

When financing a horse float for business use, there are several loan options available to Australian business owners. Each option comes with its own set of benefits and considerations.

1. Chattel Mortgage: A chattel mortgage is a popular choice for businesses purchasing a horse float. With this option, the business takes out a loan to purchase the float, while the lender holds a mortgage over the vehicle until the loan is fully repaid. The business owns the float from day one, but the lender retains a legal interest in it until the loan is settled. One key advantage of a chattel mortgage is that businesses can often claim GST credits upfront, which can provide substantial tax savings.
2. Hire Purchase: A hire purchase agreement is another viable financing option. Under this arrangement, the business hires the horse float over a set period, making regular payments, and at the end of the term, ownership of the float transfers to the business. The payments are typically lower than those of a chattel mortgage, making it easier for businesses to manage cash flow. However, the float remains the lender’s property until the last payment is made.
3. Leasing: For businesses that prefer not to own the horse float outright, leasing is an alternative option. Leasing allows you to rent the float for a specified period, with the option to purchase it at the end of the lease term. Leasing can be beneficial for businesses that need a float temporarily or those who want to avoid the responsibilities of ownership.

Each financing option has its own set of pros and cons, so it's crucial for businesses to carefully consider which plan best suits their cash flow, tax considerations, and long-term goals.

Why Work with a Broker for Business Financing?

While applying directly through a bank may seem like the most straightforward route to securing financing for your horse float, working with a finance broker can offer several advantages, particularly when it comes to navigating business financing options. Brokers have access to a broad network of lenders, including both traditional banks and non-bank lenders, which means they can compare a wide range of loan products to find the best option for your business.

1. Expertise in Business Financing

Finance brokers have a deep understanding of the nuances involved in business financing. They know the ins and outs of chattel mortgages, hire purchase agreements, and leasing options. This expertise ensures that your business can secure the most suitable financing, even if you're unfamiliar with these loan types. Brokers can provide valuable guidance on tax implications, loan structure, and cash flow considerations, ensuring that your financing solution aligns with your business’s unique needs.

2. Access to a Wide Range of Lenders

Banks often have rigid lending criteria, and their loan products may not be the best fit for your specific business needs. A finance broker, on the other hand, works with a variety of lenders, including smaller financial institutions that may be more flexible in their lending criteria. This broader pool of lenders increases the chances of securing approval, especially for businesses that are new, self-employed, or have less-than-perfect credit histories. Brokers have access to both big and small lenders, which allows them to offer more competitive rates, terms, and repayment options.

3. Better Loan Terms and Rates

One of the key benefits of using a broker is the potential to secure better loan terms and lower interest rates. Brokers are often able to negotiate with lenders on your behalf, using their industry relationships and negotiating skills to secure more favourable rates than you might be able to obtain independently. This can save your business money over the term of the loan and help you keep costs down. When financing a horse float, even small differences in interest rates can have a significant impact on the overall cost of the loan, so a broker’s ability to secure better rates is invaluable.

4. Time and Effort Savings

The process of applying for financing can be time-consuming, particularly for businesses that are already stretched thin with day-to-day operations. Brokers handle much of the paperwork, applications, and communications with lenders, saving your business valuable time. They will ensure that all documentation is in order and that your application is presented in the best possible light to increase the chances of approval. This means you can focus on running your business while they handle the financial legwork.

5. Tailored Solutions for Your Business

Every business is unique, and brokers understand that one-size-fits-all financing solutions don’t always work. Brokers take the time to assess your business’s specific situation and match you with the most suitable lender and loan product. Whether you need a chattel mortgage for tax advantages, a hire purchase plan for manageable payments, or a leasing option for flexibility, brokers can help find the perfect solution for your business needs.

Conclusion

Securing financing for a horse float is a vital step for businesses in the equine industry. Whether you’re looking to purchase a float for breeding, transport, or other business purposes, choosing the right financing plan is key to maintaining healthy cash flow and achieving long-term business success. While applying directly with banks may seem like the obvious choice, working with a finance broker offers several advantages, including access to a broader range of lenders, expert advice, better loan terms, and time-saving support. By partnering with a broker, your business can secure the best possible financing for a horse float, ensuring a smooth and cost-effective purchase.

DISCLAIMER

The information provided on this website is general in nature only and has been prepared without considering your financial needs, circumstances and objectives and should NOT be construed as financial, taxation or legal advice. For more information, get in touch with our experienced partner brokers today.