Commercial Hire Purchase

The features of Commerical Hire Purchase include:

• Acquisition of new and late model goods
• Goods are owned by the financier and hired to the customer ("Hirer")
• Ownership of the goods automatically passes to the Hirer upon completion of the contract
• Goods must be used predominantly (more than 50%) for commercial or business purposes, and use of the goods must derive taxable income for the Hirer *
• The Hirer is wholly responsible for maintaining, repairing and insuring the goods
• The Hirer is entitled to claim depreciation on the equipment *
• The Hirer is able to claim an ITC for the GST on purchase of the equipment, however the method of claiming the ITC depends on the accounting method (either cash or accrual) which applies to your business. *
• Interest on the loan may be claimed by the Hirer as a tax deduction *
• Instalments can be structured as equal monthly or structured to suit your business cash flow or seasonal conditions
• A Commercial Hire Purchase can be fully amortised, or a balloon payment can be structured at the end of the term of the contract. This is not governed by Australian Taxation Office guidelines, however financiers prefer to set a balloon payment which will reflect the real value of the goods at the end of the term. *

*Please check with your accountant or financial advisor.