Products

& Services

Products

Magnolia Lane can organise a wide range of finance products. We have access to a full suite of lenders allowing us to tailor funding solutions specific to your needs. Equipment finance products are typically arranged over a fixed term at a fixed rate. The repayments can be structured according to your needs and the only security is the asset you are funding.

Chattel Mortgage (Specific Security Agreement)

A Chattel Mortgage, also known as a Specific Security Agreement works in a similar fashion to the traditional Commercial Hire Purchase product (CHP) with the same tax deductions and flexibility surrounding its terms and balloon payments.

It has grown in popularity beyond the CHP due to a borrower’s ability to claim back their full GST (input Tax Credit) upfront regardless of which tax system the business runs (cash basis or accrual basis).

Similar to a property loan, with a Chattel Mortgage the goods are “owned” by the customer and the lender takes a “mortgage” or “charge” over the goods, to secure the loan.

Some of the key benefits include:

  • Ability to claim GST (Input Tax Credit) upfront on both cash & accrual basis
  • Up to 100% financing (including GST)
  • Full ownership of equipment at end of term
  • Flexible term and balloon payment options
  • Fixed Payments for ease of cash flow management.
  • Attractive tax deductions of interest expense & depreciation.
Commercial Hire Purchase

Commercial Hire Purchase (CHP) is a sensible approach for any business or individual that needs to either upgrade or acquire a new asset. Fixed payments are made over the term you choose and full ownership of the asset is transferred to you at the end of the contract.

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

Attractive tax deductions exist through a CHP for depreciation on the asset, as well as the interest component of the loan repayments when the asset is used for business related purposes.

It should be noted that GST is charged on the interest payable in the loan which can either be funded or paid upfront.

Some of the key benefits include:

  • Up to 100% financing (including GST)
  • Full ownership of equipment at end of term
  • Flexible term and balloon payment options
  • Fixed Payments for ease of cash flow management
  • Attractive tax deductions of interest expense & depreciation
Finance Lease

Under a finance lease agreement, the lender (“Lessor”) purchases the equipment and agrees to lease it back to the customer (“Lessee”) for an agreed term and rental. The lender pays the GST which is applicable to the initial purchase of the goods. The lessee is not liable to pay the GST on the purchase of the goods however, each instalment amount paid under the agreement is subject to GST.

Monthly lease payments are tax deductible and the equipment remains the property of the Financier, throughout the finance term.

All businesses registered for GST can claim the GST portion of each payment as an input tax credit.

The final residual amount payable under a lease agreement is also subject to GST.

Under a finance lease agreement, the Lessee is responsible for maintenance and running costs, insurance and registration fees for the leased item.

Some of the key benefits include:

  • 100% of monthly payments are tax deductible
  • Repayments can be tailored to suit seasonal cash flow with a known residual at end of term
  • No ownership obligations
  • The financing is supplied using the equipment as collateral or security against the debt
Novated Lease

A Novated Lease is a Finance Lease with one important difference.

It is altered by a “Deed of Novation” whereby a third party (the employer) enters into an agreement to make repayments of behalf of the Lessee (the employee).

For example, an employee enters into a Lease for a new motor vehicle. While the Lease is in the employee’s name, the employer undertakes (by way of the Deed of Novation) to pay the monthly instalments on the employee’s behalf, usually out of the employees pre-tax earnings.

This type of financing is used primarily for salary packaging purposes and generally applies to goods such as motor vehicles.

It should be understood that even though the employer undertakes to make repayments, the employee must qualify for the Lease in their own right, and the employee is ultimately responsible and liable for all instalments and the Residual value.

Some of the key benefits include:

  • Payments made from pre-tax earnings
  • Flexibility to package all maintenance & running costs into lease
  • Ownership held by borrower but payment made by employer while under their employment
Operating Lease

An operating lease works essentially as a long term rental agreement where the borrower never owns the asset and makes a defined monthly payment for its use over a prescribed period. At the end of this period they are required to hand the goods back to the lender.

An operating lease is not capitalised; it is accounted for as a rental expense in what is known as “off balance sheet financing”.

Operating leases have tax incentives and do not result in assets or liabilities being recorded on the lessee’s balance sheet, they are simply deemed an operating expense and noted on a business’s profit & loss statement.

Options are available for fully maintained operating lease where all servicing, warranties and running costs can be bundled into the lease resulting in one ongoing fixed costs which can help with cash flow budgeting.

Some of the key benefits include:

  • Off balance sheet funding. No debt in the balance sheet
  • Flexible fully maintained lease options
  • Fixed costs assist with cash flow management
Rent to Purchase (RPO)

The rent to purchase or RPO product is not new to the earthmoving and mining industry with dealers offering a version of this for many years to their customers. The idea of renting a piece of equipment for a defined period of time and then having the ability to purchase that same machine allows users to manage the risk of that equipment  purchase and essentially try the unit before they buy it.

Magnolia Lane has partnered with Iron Capital and taken the RPO model to a whole new level by offering this product to customers looking to acquire equipment, matching their cash flow needs and at the same time, building equity in the equipment over a defined period. We can offer longer terms than traditionally offered by dealers – in some cases as long as three years, thereby flattening the payments and building significant equity in the unit.

RPO is not a finance product – it is more for the user who is considering renting a machine over a longer term, but sees enough risk in ownership over this period to want to share the risk with a partner. At the end of the term, the customer has the ability to hand back the equipment, or alternatively buy the equipment back via financing or an outright purchase. The customer enjoys the freedom of ownership and has the responsibility to maintain the machine and ultimately get the value of the machine in the end.

Many users spend a significant amount on renting machines, only to have to give them back to the rental company at the end of the term – RPO gives the user the option to get back some of this rental in acquiring the machine at the end of the specified period.

Services

Magnolia Lane is strategically aligned with vendors which allow us to offer the following services:

Property Finance

In the market for a new home, investment property or commercial office space? Magnolia Lane have partnered with Smartmove Professional Mortgage Advisors to provide a wide range of Residential, Commercial and Investment lending services for all individuals from PAYG employees to self-employed and first home buyers.

Additionally we can assist with any property refinancing requirements and are able to provide an array of business loans and cash flow facilities to suit any number of needs.

The team at Smartmove Professional Mortgage Advisors provide exceptional service and advice, offering you the benefit of our industry expertise and a large network of Australia’s leading lenders who value what we do. Smartmove has access to over 1350 finance products, with an extensive suite of loans to suit first home buyers and investors as well as those who are self-employed.

www.smartmove.com.au

Smartmove logo

General Insurance

Everyone needs insurance and the team at Gow-Gates Insurance Brokers can ensure that your business is comprehensively covered from the ground up. Whether it be cover for your plant and equipment, public liability, contract works, workers compensation or professional indemnity to name a few, they can tailor a package to suit your needs.

With over 50 years of specialisation in the Australian and international insurance markets, Gow-Gates is the partner of choice for many of Australia’s best-known businesses, associations and individuals.

www.gowgates.com.au

GowGates

Risk Insurance

Magnolia Lane have appointed MBS Insurance to offer our clients Personal Risk Insurance including Life cover , Income protection, Total and Permanent Disability, Trauma, Key man and Business buy/sell insurances which are all crucial in protecting an individual’s and their family’s future.

With over 60 years of experience, MBS Insurance are able to assist in making that process simple, understanding and cost effective.

www.mbsinsurance.com.au

MBSInsurance

Debtor Finance

This is an intelligent finance solution for those looking to fast track the payment of their invoices, ensuring a steady cash flow for their business. A handy alternative to business overdrafts that more often than not require real estate security.