Leasing

Commercial Hire Purchase can present an ideal finance option for those businesses that use the Accrual method of accounting, as for tax purposes it provides this type of business with ownership.

A Commercial Hire Purchase provides such businesses the ability to claim the full Tax Input Credits for the GST portion of the purchase when the business lodges its next BAS

Commercial Hire Purchase Key Features

The Key Features Of a Commercial Hire Purchase Are

  • Flexible Terms You can choose from terms of 1-5 years.
  • Flexible Residual You can choose to factor in a residual, but it is not compulsory.
  • Repayment Options You can choose to structure a repayment schedule that suits. This could be monthly, Quarterly, Bi-Annually, or Yearly.
  • You can claim the depreciation of the goods and the interest component of your repayments as a business expense providing the goods have business use.

Commercial Hire Purchase Loans and Security

The security offered for a Commercial Hire Purchase should only be the goods that you are actually financing. No further security should be required other than the guarantee of the borrower.

Commercial Hire Purchase Loan Costs

Commercial Hire Purchase costs can range from $0 to $350 for establishment and interest rates should be the same a chattel mortgage type loan.

A Chattel Mortgage can present an ideal finance option for those businesses that use the cash method of accounting. It provides the business or individual financing the goods with ownership.

A Chattel Mortgage provides such businesses the ability to claim the full Tax Input Credits for the GST portion of the purchase when the business lodges its next BAS

Chattel Mortgage Key Features

The Key Features Of a Chattel Mortgage Are

  • Flexible Terms You can choose from terms of 1-5 years.
  • Flexible Residual You can choose to factor in a residual, but it is not compulsory.
  • Repayment Options You can choose to structure a repayment schedule that suits. This could be monthly, Quarterly, Bi-Annually, or Yearly.
  • You can claim the depreciation of the goods and the interest component of your repayments as a business expense providing the goods have business use.

Chattel Mortgage Loans and Security

The security offered for a chattel mortgage should only be the goods that you are actually financing. No further security should be required other than the guarantee of the borrower.

Chattel Mortgage Loan Costs

Chattel Mortgage costs can be slightly larger than say a lease or commercial hire purchase. the charge against the goods will have to be lodged with ASIC and there are fees associated with this.

A Finance Lease also referred to as a lease or business lease, it may suit those businesses who wish to have an Off Balance Sheet style of funding. You are not the owner of the goods so the value of the goods will not be entered on your balance sheet so neither the contingent liability.

The Finance Lease Provider will buy the goods on your behalf, and you will lease (rent) the goods back from them for a predetermined term, monthly repayment and residual.

Finance Lease Key Features

The Key Features of a Finance Lease are:

  • Flexible Terms You can choose from terms of 1-5 years.
  • Fixed Residual A residual may be compulsory, this residual is set by the lease provider and is calculated using the ATO depreciation guidelines.
  • Repayment Options You can choose to structure a repayment schedule that suits. This could be monthly, Quarterly, Bi-Annually, or Yearly.
  • You can claim the entire or just a portion of the lease repayment as a business expense, depending on the percentage of business use.
  • Your Lease Repayments will attract a GST charge as will the residualYou Will Make Repayments on the purchase price minus GST. In other words you do not finance the GST at the time of setting up the lease but it is still paid for you.

Leasing and Security

The security offered for a Leaseshould only be the goods that you are actually financing. No further security should be required other than the guarantee of the borrower.

Leasing Costs

Leasing costs can range from $0 to $350 for establishment and interest rates should be the same a a chattel mortgage or commercial hire purchase type loan.