mv + equipment leasing

Under a Lease agreement, the Financier (Lessor) purchases the vehicle or equipment and leases it to you (the Lessee) at a fixed rate over a specified term (usually 3 to 5 years). A lease will typically have a residual or 'balloon' payment at the end of the lease term. At the end of the term, the asset is owned by the Lessor, however you may have the option to purchase.

Lease payments are tax-deductible to the percentage the equipment or vehicle is used for business. Lease and residual payments attract GST, however this may be claimed as an input tax credit where the Lessee is registered for GST and goods are used for business purposes.

Leasing agreements are commonly used to finance motor vehicles, office equipment, machinery, buildings and commercial fit out. Motor vehicle leases may also take the form of an Operating lease or Novated lease. Some lenders will also consider a Finance or Operating Lease on a " Sale and Lease Back" basis if you have previously paid for your equipment. However, this may depend on the age of the equipment and the length of time you have owned it.

commercial hire purchase

Commercial Hire Purchase agreements enable commercial users to purchase goods by means of installment repayments over a specified term (ranging from 1 to 5 years), with guaranteed ownership at the end of the agreement. A hire purchase will typically have a residual or 'balloon' payment at the end or option for a deposit at the beginning of the agreement.

Unlike a lease, you own the asset and hence depreciation and interest are usually tax-deductible, when the equipment is to be used for business purposes. The GST applicable to the purchase of the asset on the purchase contract can be paid or included in the amount to be financed. GST does not apply to each repayment or the residual/balloon, if applicable.

Some lenders will also consider a Hire purchase on a " Sale and Lease Back" basis if you have previously paid for your equipment. However, this may depend on the age of the equipment and the length of time you have owned it.