How Smart Australian SMEs Are Using Asset Finance to Grow — and Save on Tax

The Instant Asset Write-Off has provided valuable tax relief for many SMEs in recent years, allowing eligible businesses to claim an immediate deduction for the full cost of assets up to a certain threshold rather than depreciating them over time.

While the thresholds and rules change periodically, the key takeaway is this:

• The asset must be installed and ready for use by June 30 of the relevant financial year.
• Planning purchases and securing finance approvals early can help ensure businesses can take advantage of available tax incentives.

Speak with your accountant to confirm the current eligibility criteria and thresholds for the Instant Asset Write-Off.

Many Australian SMEs choose chattel mortgages for asset purchases. This finance structure provides several benefits:

• Immediate ownership of the asset
• Potential to claim the GST upfront (if registered for GST)
• Ability to claim depreciation and interest as tax deductions
• Flexibility to structure balloon payments, helping manage cash flow

Strategically timing a chattel mortgage purchase before the end of the financial year can maximise tax deductions, making it a tool worth considering for businesses planning equipment upgrades.

For businesses that prefer not to own rapidly depreciating assets or need to upgrade equipment frequently, leasing can be an excellent alternative.

Finance leases and operating leases often allow lease payments to be treated as business expenses, making them potentially tax-deductible. Leasing can also simplify the process of keeping your technology or machinery up to date without significant upfront costs.

A growing trend in asset finance is the availability of green finance options. Many lenders are offering preferential rates or terms for assets that contribute to sustainability goals, including electric vehicles, energy-efficient equipment, and renewable energy systems.

Businesses seeking to enhance their ESG (Environmental, Social, Governance) credentials or reduce long-term operating costs may find significant value in exploring sustainable asset finance products.

Many business owners approach their existing bank for asset finance without exploring other options. However, engaging a specialist asset finance broker can offer significant advantages:

✅ Access to a wider range of lenders and products
✅ Potentially more competitive rates and terms
✅ Finance structures tailored to your cash flow and tax planning
✅ Assistance with paperwork and negotiations

✅ Fund growth without tying up cash reserves
✅ Take advantage of tax benefits
✅ Stay competitive with modern, efficient equipment
✅ Move towards sustainability goals

If you’re considering new equipment, vehicles, or sustainable upgrades this year, our team is ready to help you explore the options. Asset finance could be one of the most valuable decisions your SME makes in 2025 and beyond.

Contact us today for a confidential discussion about how asset finance can support your business plans. Let’s make this year your strongest yet.