About Commercial Hire Purchases
A commercial hire purchase (CHP) is a particular type of finance used by businesses for the purpose of purchasing a new or used vehicle or other business equipment.
Hire Purchase is a similar agreement to that of a Chattel Mortgage, only in that the lender holds title of the security until all monies owing are paid. With Hire Purchase, however for tax purposes you can claim depreciation, running costs and interest paid, against your business income. You may also be able to claim the GST component of your purchase in your next B.A.S Statement depending on how you remit your GST (cash or accrual) always seek advice from your accountant in regard to this.
You also have the option of including an upfront deposit or trade-in to reduce your rental commitment, while a balloon payment may also be set at the end of the term (much like a lease residual) to acknowledge the vehicles end value. Alternatively, you may choose to structure your rentals to clear the debt in full over the term of your agreement (fully amortised).
Commercial Hire Purchase Benefits
- Interest charged and depreciation of the vehicle are tax deductible
- No capital outlay is required and cashflow protected
- Terms can be flexible and fixed repayments make for easy future budgeting
- After full payment of the hire purchase agreement, ownership of the goods is transferred to you.
- You have the option to make payments with or without a ballon payment at the end of the term.
Applying for a Commercial Hire Purchase
Applying for a hire purchase with Fincar is easy. We do all the hard work for you – can assist with selection of the right product for your requirements, prepare the all paperwork and submit it to the appropriate lender. As a broker we are not limited to any particluar finance company – we can shop around for the lowest interest rate, help you avoid ‘hidden’ fees and charges and most of all prepare the paperwork with the minimum of fuss and maximum of professionalism.
For more information or to request a free, no obligation CHP quotation, click here or call1300 346 227 and speak with one of our expert finance consultants.