Finance or pay cash for your next asset?
A lot of business owners pay cash just because it's sitting there. This works out the real trade-off — what financing costs you versus what keeping your cash on hand is worth.
Paying cash avoids interest, but it also drains the working capital that keeps your business flexible. Move the sliders to compare both paths on your numbers, then read the reasons owners finance even when they have the cash. General information only — confirm tax with your accountant.
Pay cash, or finance and keep the cash?
A lot of owners pay cash just because it's there. See the real trade-off — what financing costs versus keeping your cash on hand.
Estimate only, excluding fees and charges. General information, not financial, tax or credit advice — confirm tax treatment with your accountant.
Liquidity is usually worth more than the interest saved
Keeping cash in the business protects you against the unpredictable — a slow quarter, a big opportunity, a repair bill. The asset earns either way, so financing lets the same cash do two jobs. For most growing businesses that flexibility outweighs the cost of finance.
A balloon means even less cash leaves each month
Adding a balloon (residual) of around 30% lowers the monthly repayment, so financing keeps even more cash in the business month to month. You settle the balloon at the end by refinancing, paying it out, or upgrading.
You still own the asset on a chattel mortgage
Financing doesn't cost you the tax benefits — on a chattel mortgage you own the asset from day one and can generally claim GST and depreciation. Confirm the specifics with your accountant.
Example: a tradie with $120k cash buying a $90k machine
Say you've got $120,000 in the business and a $90,000 machine to buy. Pay cash and you're down to a $30,000 buffer; finance it instead — on a chattel mortgage at, say, 7.5% p.a. over 5 years with a 30% balloon, that's roughly $1,430 a month — and your $120,000 stays working. These are indicative estimates only, exclude fees, and aren't a quote; your rate and repayment depend on the lender's assessment.
What the finance actually costs you per year
On that same $90,000 example, the extra cost of financing over paying cash comes to only a few thousand dollars a year in interest. Set that against what a $90,000 cash buffer is worth when a tender lands or a truck blows a motor, and the picture often tips towards finance. Indicative only — the real numbers depend on the rate and term you're approved for.
Competitive rate plus the right structure
The goal isn't just a sharp rate — it's a structure that fits how the asset earns. We compare a panel of commercial lenders and set the term and balloon so the repayment sits comfortably against your cash flow. We arrange these on a chattel mortgage; we don't do hire purchase or finance lease.
Common questions
Sometimes — if the asset is small relative to your cash, you have no better use for the money, and you value simplicity, paying cash avoids interest. The tool helps you see when that's true versus when keeping the cash working is the stronger play.
Related finance
Ready to talk to a specialist?
Get a competitive rate and the right structure for your next asset — no obligation, no credit-file hit to ask.