More than just home loans
Our energy landscape is changing. As the price of power continues to rise, smart businesses are looking for strategies to better manage their energy costs. One solution is investing in renewable energy and energy efficiency; it can generate significant savings in energy use and costs. Energy assets usually involve a large initial investment and very low operatingcosts. In some cases, access to capital can restrict an organisation’s ability to make these types of investments.
The 2015 Budget announcement brought with it good news for small businesses looking to invest in solar PV systems and efficient lighting (LED) products. You could now have the ability to claim an immediate tax deduction for any individual assets purchased costing less than $20,000.Under the announced measure, this $20,000 limit applies to each individual item and you can apply this $20,000 rule to as many individual items as you wish, provided the asset is acquired and installed ready for use between 7.30pm (AEST) 12 May 2015 and until 30 June 2017 (and the other qualifying criteria are satisfied).
For example, if you are seeking to invest in a 15kw Solar PV system priced at $19,999, under the proposed new laws, your business could now be able to claim back an immediate deduction based on the total cost of the asset. With a company tax rate of 30%, your business could be eligible for a tax saving of $5,999.70 in the first year of purchase.
Financing your energy asset might be a good solution for your business as it removes the need to make a large upfront investment. Instead you pay regular monthly instalments. In this way, your cash outflow is better matched to your energy savings.In some cases, the value of these savings may equal, or even exceed the cost of the financing which creates a neutral or positive cash flow. A solar system for example requires a large initial investment to cover purchasing and installing the equipment. From then on, the costs involved with operating a solar system are minimal. Each year, your solar system can save you money on your energy bill.
A Chattel Mortgage allows you to own your solar system immediately. For eligible solar systems, a Chattel Mortgage entitles you to generate Small-scale Technology Certificates (STCs).These are often used to offset part of the price of your system. After the final payment has been made and the contract is complete, the mortgage is discharged giving you clear title to the asset.
If you are a business registered for GST you may also be entitled to an input tax credit resulting from your acquisition of the energy asset.
Our lending panel can finance small projects through to large multi Mw systems including design & construction costs panels, inverters, racking and mounting, as well as the expenses involved with the installation of your system. As well as solar systems, we can also arrange finance a range of energy efficient lighting installations.
The financier will consider applications from tenants who wish to purchase and install solar and energy efficient lighting equipment in their business premises on a case by case basis.