BAV Finance
BAV Finance / Bus Finance Australia was established in 2004 as an industry owned broker of financial solutions. We have financed over $400m worth of transactions including new and used buses and coaches, business and contract purchases, capital raising, refinancing, debt restructuring, insurance and workcover premium funding, motor vehicles, plant and equipment, commercial property purchases and depot constructions. We have competitive arrangements with lenders that are tailored to the bus and coach industry. We provide market leading interest rates, industry specific finance structures and quality service.
The following is a summary of various forms of financing for Bus & Coach vehicles.
Bus Vehicle Financing
The correct Bus or Coach is essential to your operations. How you pay for this vehicle, especially when financing, is also an essential element for your business cashflow and taxation requirements. When financing your Bus or Coach “leasing” is considered the most practical finance option.
Advantage of "Leasing"
- 100% funding can usually be obtained from most financiers.
- No additional tangible security requirements.
- Repayments can be structured to suit cashflow requirements I.e. incorporate monthly breaks where there is no payment, progressive lump sums, balloon payments, etc.
- GST and taxation advantages
"Leasing" could mean any of the following:
- Equipment Loan / Chattel Mortgage
- Hire Purchase
- Finance Lease
Note: These finance facilities are generally a fixed contract I.e. fixed interest rate for the loan term.
Equipment Loan / Chattel Mortgage
Generally the preferred option of many smaller bus operators particularly those who claim the “cash” accounting method for GST purposes.
- Ownership of vehicle is yours from the start.
- You can claim full GST on purchase from next BAS lodgement.
- Claim depreciation and loan interest for taxation.
- Terms of up to ten years (when new) can generally be applied.
- Option of a balloon payment on loan maturity or have loan fully repaid.
Hire Purchase
Very similar to Equipment Loan / Chattel Mortgage. This is usually the preferred option for bus operators who claim the “accrual” accounting method for GST purposes.
- Ownership of vehicle is with the Financier and the Operator (hirer) possesses the rights to the vehicle. Full ownership is transferred on completion of loan term.
- Claim full GST amount on next BAS lodgement as long as you are utilising the "accrual" accounting method.
- Claim depreciation and loan interest for taxation.
- Terms of up to ten years (when new) can generally be applied.
- Option of balloon payment on loan maturity or have loan fully repaid.
Finance Lease
Not utilised as much these days with tighter taxation obligations required – suggest discuss with Accountant for advice.
- Ownership of vehicle is with Financier and the Operator is basically renting.
- The Financier claims the GST on purchase price, not the Operator.
- GST applies to each rent / repayment instalment, which the Operator can claim.
- Cannot claim depreciation or loan interest, but can claim the rentals for taxation.
- Terms of up to ten years (when new) can generally be applied
- Residual (balloon) amount applies at loan maturity.
What information will financiers generally require..........
- Up to date financial reports (profit / loss statement, balance sheet).
- Any contractual information supporting income.
- Summary of business operations.
- Sustainability of new bus or coach I.e information to support that the loan repayments can be maintained.
Click here to download brochure .
Contact details:
Brett Collins or Steve Guille
Phone: 1800 136 854
Phone: +61 3 9914 7014 or +61 3 9914 7016
Fax: +61 3 9646 9853
Email: bcollins@busvic.asn.au or sguille@busvic.asn.au
Address: 450 Graham St, Port Melbourne, Victoria 3207