There’s Cash Sitting In Your Equipment. Here’s How to Unlock it.

Running a business right now is expensive. Fuel, labour, materials, compliance costs. They’ve all gone up, with no signs of relief coming any time soon. Most business owners dealing with a cash squeeze think their options are pretty limited: take on more finance, cut costs, or wait it out. But there is another way.

If your business runs equipment, there’s a good chance you’re sitting on cash you don’t realise you can access.

Yellowgate’s Rent to Own solution allows businesses unlock the equity tied up in existing equipment and put that cash back to work, without the equipment leaving the job site.

How It Works

The process is simple. There’s no lengthy application process, no complicated structure. Here’s what happens:

Step 1: Yellowgate buys your equipment

We purchase your existing equipment (trucks, machinery, plant) for an agreed price (up to 80% of fair market value) and place it on a 12-month Rent to Own plan. You receive the cash. The asset moves off your books.

Step 2: Your equipment stays on site

Yellowgate holds ownership, but nothing changes on the ground. The equipment keeps working and earning. There is no change to your day-to-day operations.

Step 3: You pay monthly rental

Monthly rental payments are straightforward and predictable. Better still, those payments can be claimed as a tax-deductible operating expense. More on that below.

At the End of the Rental Period, You Choose What Happens Next

Yellowgate offers maximum flexibility as we understand every business is different. When the 12-month plan wraps up, you have three options:

1. Continue Renting
   Re-contract for another term, or continue renting month-to-month.
   
2. Buy Back the Equipment
   Your rental payments accrue toward a rebate off the purchase price, so buying it back costs less than you might expect.
   
3. Return the Equipment
   Hand it back to Yellowgate with no further rental obligation.

The Rental Tax Advantage

This is one of the most compelling parts of a Rent to Own arrangement, and it’s something a lot of business owners haven’t considered.

With a standard loan or finance product, only the interest portion of your repayments is tax deductible. With Rent to Own, your entire rental payment is tax-deductible as an operating expense*. Making for a more efficient outcome at tax time.

*Taxation advice is general advice only. Speak to your accountant to determine whether Rent to Own is right for your situation.

Real Example: How Our Customer Used Rent to Own to Clear Tax Debt

PROBLEM: A customer came to Yellowgate needing to clear their $200,000 tax debt. They had multiple trucks in their fleet, and needed a solution that would free up cash without removing any assets from the job site.

SOLUTION: We purchased one of their spreader trucks and placed it on a Rent to Own plan.

The cash went straight to clearing the tax debt. The asset moved off their books, the debt was cleared, and the truck never left the fleet. The rental payments are being recorded as a tax-deductible operating expense, while also accruing toward a rebate off the cost of buying back the equipment when the time is right.

It’s a clean outcome, without causing any disruption to daily operations.

Is This The Right Option For Your Business?

Rent to Own works well for businesses that:

• Run existing equipment and want to access the equity in it
• Need access to working capital quickly and can’t afford equipment downtime
• Want to avoid increasing debt on the balance sheet
• Are looking for a more tax-efficient alternative to traditional finance

The equipment doesn’t need to be owned outright. If there is sufficient equity in the asset, we can purchase it and pay out any existing finance as part of the deal.

Find Out How Much Equity is Sitting In Your Equipment

If you’ve got equipment on the books and you need cash, contact us. We’ll look at what you have and give you a clear picture of what’s possible.

No obligation. No complicated process. Call us on 1300 225 594 or request a call below and we’ll be in touch.