Hire Purchase

A Commercial Hire Purchase (CHP) agreement is simply a contract where the financier (the ‘owner') 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

Anyone seeking a business loan to finance the purchase of vehicles, plant and equipment, business and professional equipment without encumbering any real estate security that can be used for other purposes.

Key Features

Secured by the equipment or vehicle.
Flexible payment options.
No deposit and an amount that suits you.
Option for end of term balloon payment.
Goods owned by financier until final payment when ownership transfers to hirer.
Interest and depreciation on the asset purchase are tax deductible, when used to produce income or the expense is necessary for carrying on a business.
You can repay the contract at any time.

Benefits

Repayment can be structured to suit your cash flow.
Obtain goods for minimal cash outlay, so working capital is not significantly affected.
Possibly make use of the taxation benefits of hiring.
Flexible repayments allow for better capital budgeting.

GST

Most hire purchase agreements are subject to GST. We recommend you see your accountant or financial planner for specialist advice or let us recommend one of our professional partners to help you through this process.

At Ray Backhouse – Lifespan Financial Services we have unique partnership arrangements with a number of experienced and professional accounting and financial planning firms that can provide you with the specialist advice for your particular situation or type of business. This network of professional services ensures that your interests are coordinated in a manner that delivers the best results across all aspects of your financial circumstances.

Interest rates

The interest rate depends on the amount being financed and the security used. It is fixed throughout the term of the loan.

Fees and Charges

An establishment fee applies, with no applicable GST.
A cash booklet is an additional charge

Repayment Schedules

Repayments can be made

Monthly
Quarterly
Semi Annually
Seasonal
Yearly, or
Negotiated.