Whole of Life Asset Funding

To achieve an optimal financial outcome, we can match finance term to the asset's economic life.

By determining the optimal financing term, a lower total asset funding cost can be achieved.

The analysis of utilisation, operating conditions, 'best practice' maintenance programs and technology are relevant considerations in achieving the most cost effective financing terms.

For example:

• Longer financing terms may reduce monthly financing payments yet aged equipment typically attracts higher maintenance provisions;
• Consequently, a correct balance must be reconciled with a view to achieving the lowest total whole of life asset funding cost;
• Depreciation and GST in relation to the funding product should be addressed to assess the after tax, whole of life funding cost, and
• Short versus long term interest rate profiles can materially impact total funding cost.

Questions?

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