Types of Finance

Commercial Hire Purchase

A Commercial Hire Purchase is a hire agreement between you (the hirer) and us (the owner) for an agreed period. It can be used to finance the purchase of most business assets. The full cost of the goods does not have to be financed. You can use trade-in equity or deposit to reduce the amount financed. At the end of the agreed period a Balloon Payment may remain or facility can be structured so there is no Balloon Payment. The Balloon Payment must be in accordance with lending guidelines.

Finance Lease

A Finance Lease is a rental agreement between you (the lessee) and us (the lessor) for an agreed period. It can be used to finance the purchase of most business assets. The full cost of the goods must be financed. You cannot use any trade-in equity or deposit to reduce the amount leased. At the end of the agreed period a Residual Value remains. The Residual Value must be in accordance with taxation and lending guidelines.

Rental Agreement

A Rental Agreement is between you (the lessee) and us (the lessor) for an agreed period. It allows the lessee to gain use of most business assets without purchasing the goods. The full cost of the goods must be rented. You cannot use any trade-in equity or deposit to reduce the amount rented. At the end of the agreed period you must return the goods to us.

Chattel Mortgage

A Chattel Mortgage is a loan agreement between you (the borrower) and us (the lender) for an agreed period. It can be used to finance the purchase of most business assets. The full cost of the goods does not have to be financed. You can use trade-in equity or deposit to reduce the amount financed. At the end of the agreed period a Balloon Payment may remain or facility can be structured so there is no Balloon Payment. The Balloon Payment must be in accordance with lending guidelines.

Novated Lease

A novated lease is a three way agreement between the customer (lessee), employer and the financier. These facilities can also include fully maintained and non maintained operating lease. Under a novated lease, your employer assumes responsibility for lease payments coming from your pre-tax earnings.

Other Benefits include:

Flexibility in choice of Vehicle
Running costs can be included in repayments out of pre-tax earnings
Retain the vehicle should you leave the employer

Summary

	Commercial Hire Purchase	Finance Lease	Rental Agreement	Chattel Mortgage
Security	Most business assets.	Most business assets.	Most business assets.	Most business assets.
Taxation	The hirer may be entitled to claim the depreciation on the asset and the interest portion of the instalment.	The lessee may be entitled to claim the full monthly rental.	The lessee may be entitled to claim the full monthly rental. Consult your accountant or financial advisor for taxation advice .	The borrower may be entitled to claim the depreciation on the asset and the interest portion of the instalment.
Interest Rate	Fixed for the term of the contract.	Fixed for the term of the contract.	Fixed for the term of the contract.	Fixed for the term of the contract.
Application Fee	Minimum Fee $330	Minimum Fee $330	Minimum Fee $330	Minimum Fee $330
On-Going Fees	Nil.	Nil.	Nil.	Nil.
Government Duties & Impost	Government stamp duty is payable on each instalment. Government stamp duty is not payable on the Balloon Payment. GST is payable on the stamp duty portion of the instalment.	Government stamp duty is payable on each rental instalment. GST is payable on each rental instalment and Residual Value.	Government stamp duty is payable on each rental instalment. GST is payable on each rental instalment.	Government mortgage duty is payable on the loan amount, and is payable at the start of the loan. ASIC registration charges may be payable.
Preferred Minimum Loan Amount	$5,000	$5,000	$5,000	$5,000
Maximum Loan Amount	No maximum, subject to lending criteria.	No maximum, subject to lending criteria.	No maximum, subject to lending criteria.	No maximum, subject to lending criteria.
Loan Term	Minimum 12 months. Maximum 60 months.	Minimum 12 months. Maximum 60 months.	Minimum 12 months. Maximum 60 months.	Minimum 12 months. Maximum 60 months.
Interest Calculation	Interest is calculated monthly in advance on settlement.	Interest is calculated monthly in advance on settlement.	Interest is calculated monthly in advance on settlement.	Interest is calculated monthly in advance on settlement.
Repayments	Payable by Direct Debit. Principal & Interest for the term of the contract.	Payable by Direct Debit. Principal & Interest for the term of the contract.	Payable by Direct Debit.	Payable by Direct Debit. Principal & Interest for the term of the contract.
Repayment Frequency	Monthly repayments required. Alternative repayment frequency can be structured to suit cash flow requirements.	Monthly repayments required. Alternative repayment frequency can be structured to suit cash flow requirements.	Monthly repayments required.	Monthly repayments required. Alternative repayment frequency can be structured to suit cash flow requirements.

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