How to finance your next photography equipment purchase

The key considerations are how much will you need to borrow, the loan period, interest rates, fees, and eligibility.

For amateur and semi-pro photographers

If you’re an amateur or semi-pro photographer with a full-time job unrelated to photography, you may want to consider other ways to finance your new equipment. Credit cards may be a much easier route, however they can cost you much more in interest than a personal loan.

For example, owing $1,500 on a credit card with a 20% per interest rate – if you only make the minimum repayments each month, it would take 18 years to repay, with over $3000 in interest! It is fair to say that minimum credit card repayments really equate to a debt trap for the unwary.

Savvy Managing Director Bill Tsouvalas says it makes more financial sense to opt for a personal loan. “Even though it takes a bit of time to get documents together for approval, a personal loan for the same amount at 11% per year over three years means only $267 in interest with monthly repayments of $49 per month. A personal loan is far more economical than paying credit card interest and the defined loan period enforces financial discipline.”

For professional photographers

If you rely on your equipment to make a living, you may have been apprehensive about getting a consumer personal loan where you need to prove you’re a low enough risk to gain eligibility.

However, if you use your cameras and equipment for business more than 50% of the time and have an active ABN, you can qualify for business-specific equipment finance, known as a chattel mortgage or hire purchase.

Both loan types are functionally similar – you can borrow more than 100% of the equipment’s value and pay off the equipment over time; usually between 12 months to five years, even seven years in some cases. The main difference is ownership: a chattel mortgage gives you asset ownership immediately, whereas the bank or lender retains ownership of the equipment in a hire purchase. This has certain benefits depending on your accounting method.

Tsouvalas says it also gives photographers extra tax benefits. “Business equipment finance gives you tax breaks including getting your GST back, interest paid back, and depreciation up to the depreciation limit. You may also be eligible for the instant asset write-off.”

How to get help

Savvy helps amateur and professional photgraphers gain access to finance where banks and other lenders may not cater to their specific needs. “Going to your bank and ending up being turned away is not only frustrating but puts a clamp on your work whether you’re making a bit of money from photography or it’s your full-time job,” Tsouvalas says. “Going to a broker like Savvy gives you far more flexible options when it comes to finding equipment finance.

“Remember to speak to your accountant or bookkeeper before making any final decision on finance.”