Jade offers equipment lease facilities at extremely attractive interest rates for the purchase of all types of business equipment. Asset Lease is a commercial loan product where the borrower has full use of the equipment throughout the term of the loan while the lender retains ownership. The lender effectively purchases the plant or machinery and leases it to you for the term of the lease.
When you, the borrower, finalise all payments including the residual, you purchase the equipment from the lender and acquire full ownership.
The key benefit of this type of financing is in improving the borrowing company’s balance sheet. The asset remains on the lender’s balance sheet rather than appearing on the borrower’s balance sheet as an asset/liability. Your Jade Equipment Finance consultant can explain the details of Asset Leasing, however, we advise you always seek specific advice from your accountant.
Equipment Asset Leasing Key Features
- Asset Lease deals are all structured with Jade’s trademark better interest rates.
- The entire purchase price of the equipment is included in the lease.
- No deposit is required by the lender, conserving your existing cash reserves.
- Fixed interest rate for the full term of the asset lease.
- Fixed loan term. Your Jade consultant will discuss the optimum loan term to suit your business objectives.
- Lease terms from 12 months/1 year up to 84 months/7 years
- Fixed monthly repayments. Your Jade consultant will negotiate with the lender to ensure an affordable repayment level based on your budget.
- Monthly lease payments and residual payments are tax deductible, as determined by the Australian Taxation Office.
- Fixed residual amount, payable at the completion of the asset lease term.
- GST on the full purchase price is claimed by lender, as they are effectively purchasing the equipment.
- As the lender can claim back the GST, the amount financed in the lease is the equipment purchase price ex GST.
- GST on the monthly lease payments and residual (when paid) is claimed by the borrower.
- The monthly lease payment appears on your (the borrower) balance sheet as an operating expenditure rather than having the full price of the equipment as an asset/liability.
- After paying the term of the monthly lease payments, the residual is finalised and the ownership of the equipment is transferred to the borrower.
Equipment Lease Calculator - Need an idea on repayments - Use our calculator
Finalising the Asset Lease
When you come to the final monthly payment of your asset lease, it is time to consider how you will pay-out the residual. The amount will obviously depend on the initial purchase price of the equipment and be in line with the required ATO residual Value Guidelines.
Your Jade Equipment Finance consultant will present you with these options:-
- Paying the residual from you current cash flow.
- Selling the equipment and replacing with new equipment.
- Re-financing the residual with a new asset lease, chattel mortgage or commercial hire purchase loan package.
Once you have finalised the residual in cash or through a new finance deal, you take ownership of the equipment.
Asset Leasing is available to businesses of all sizes for the purchase of a wide range of equipment.
Speak with a Jade Equipment Finance Consultant to discuss an Asset Lease for your proposed equipment purchase. Call 1300 000 003