Rent To Own Explained: An Alternative Pathway To Buying Heavy Machinery

Yellowgate Group has helped clients across Australia get the equipment they need through their flexible rent to own model. But what exactly is it, and why is it such a useful alternative pathway to asset ownership?

Plenty of Australian businesses need fast access to heavy machinery, but are often challenged by traditional procurement methods.

For many businesses, high up-front costs and lengthy finance processes are a barrier to accessing the equipment they need.

But there’s an alternative pathway to asset ownership, and it comes in the form of Yellowgate Group’s flexible rent to own model.

It’s a model that suits businesses across a range of industries – from earthmoving and mining, to civil and construction, agriculture, and heavy haulage – as Yellowgate’s long-standing Managing Director, Chris McRae, attests.

“You select the equipment, you tell us which model you’re after, and we provide a 12-month rental agreement that affords far greater financial flexibility than if you’d simply stumped up the cash to buy the gear outright.”

It’s that 12-month certainty that proves such a drawcard for many of Yellowgate’s clients, with the chance to secure an asset that doesn’t impact the balance sheet an obvious attraction for those crunching the numbers in the finance department. 

A tax-deductible operational expense

While Yellowgate’s rental options are both flexible and fast – McRae says they can settle within 24 hours of receiving all relevant documents – they’re not the only reason so many businesses are choosing the rent to own pathway over simply buying outright.

That’s because Yellowgate offers a diverse range of options when it comes to choosing what to do with the equipment – from buying it once the initial term is up, to continuing to rent, or simply returning the equipment at the end of the term.

And while standard rental agreements are a minimum 12 months – with a minimum equipment value of $AU 50,000 – you can either source the equipment yourself or simply ask Yellowgate to source it for you.

Best of all, your rental payments are a tax-deductible* expense which you can put towards a rebate off the purchase price of your equipment.

“If you’re looking at a purely finance model for purchase, like a chattel mortgage, only the interest component is tax deductible,” McRae said.

“Whereas with a rental payment, the whole lot is.

Those rental payments underpin the Rent Now, Buy Later ownership model, because you can choose to purchase the asset at an agreed price at the end of the fixed term.   

“Every payment you make to Yellowgate Group can ultimately go towards you owning the asset – should you choose to purchase it at the end of the rental agreement.”

It’s that outright ownership option that makes the rent to own model such an attractive proposition, with businesses using the certainty of a 12-month timeframe to bolster their cash flow when the machinery is in use, while enjoying the flexibility of choosing what to do with the equipment once the rental agreement is up.

And in an always evolving market where businesses often need to remain agile, there’s no obligation to buy an expensive piece of equipment you may no longer need.

A range of options to suit every budget 

Determined to see the familiar bright yellow of a Cat 315 on site? Yellowgate can source it.

However your choice of equipment is not limited to certain brands; Yellowgate can source and supply a huge range. 

“I think about a Japanese company like Kobelco and I can see why plenty of operators wouldn’t mind using one of their excavators – either because they like the way it controls, or they’ve got other Kobelcos out on site. Whatever it is you’re looking for, we’re happy to source and supply it.”

That flexibility extends to sourcing both new and used machines – from a brand new excavator to a second-hand backhoe, and everything in between. 

“Where that flexibility becomes useful is when operators are looking at second-hand equipment out on the open market that they might only need for a fixed period of time,” McRae said.

“We give them the freedom to choose the equipment that suits their specific needs – whether it’s new or second-hand – and if they don’t need it after their rental period, they can simply hand it back.”

A rent to own pathway born from industry experience

If there’s one thing that sets Yellowgate Group apart, it’s the fact that those behind the business have worked on the other side of the industry line.

That includes Chris McRae.

“I was actually a long-term hire customer of one of the shareholders who brought me into the business,” the now Managing Director explained.

“So I know from first-hand experience how important it is that we’re fast, that we’re transparent, and that we create a level of flexibility around our rental agreements,” he added.

Finding the right acquisition strategy for heavy machinery doesn’t have to be complicated. 

Yellowgate makes it simple, by offering an alternative rent to own pathway to asset ownership tailored to your specific business needs.

No matter where you are in Australia, we can get you the gear you need. 

Contact us to find out more about our range of Rent Now, Buy Later solutions.

*All taxation and accounting considerations are general advice only. Seek independent advice from your accountant before making any decision based on this information.