Hire Purchase and Leasing

What is Hire Purchase?

The Hire Purchase agreement is simply a contract where the 'owner' of the goods allows you (the 'hirer') the right to possess and use an item of equipment in return for regular payments. When the final payment is made, the title to the goods is transferred to you.

Who can benefit?

All businesses wishing to finance the purchase of motor vehicles and trucks, industrial plant and equipment, earthmoving equipment, business and professional equipment.

What are the features?

Repayment schedules are flexible.
An Offer to Hire can be arranged with no deposit or an amount that suits you.
Balloon payments at the end of the term can be arranged.
The interest component of the rental and depreciation on the equipment are tax deductible, provided it is used to produce assessable income or the expense is necessarily incurred in carrying on a business.
You can repay the contract before the term ends.

What are the benefits?

Repayment schedules can be structured to suit your cash flow.
You can obtain the use of goods for minimal cash outlay, so working capital is not significantly affected.
You may be able to make use of the taxation benefits of hiring.
Flexible repayments allow for accurate capital budgeting.
Interest rates
The interest rate depends on the amount being financed and the security of the applicant.
An establishment fee applies.
Break costs may apply in some states.

What is Leasing?

The lease agreement is a contract where the lessor purchases the equipment or vehicle required by you (the lessee) and is therefore, the owner of the good(s). We then lease the goods to you under a Lease Agreement, which sets out the residual value of the goods, the term of the lease in months, the monthly rental and the depreciation rate.

Who can benefit?

Any firm, partnership, company and professional or business people who want to acquire plant-equipment, motor vehicles, or similar goods used in the production of assessable income.

What are the features?

Can obtain equipment without capital outlay.
Flexible repayment frequencies
Flexible terms and conditions (maximum term 60 months).
The residual value of the leased goods is established in accordance with a schedule issued by the Commissioner of Taxation.
Lease rentals are usually tax-deductible, if the leased goods are used to produce assessable income.

What are the benefits?

You have the option to select the length of the lease term and the timing of repayments to suit your cashflow (maximum term 60 months).
You can negotiate rentals and residual values within an approved range, allowing more flexibility in budgeting.
You may be able to make use of taxation benefits.