Jade Equipment Finance offers Commercial Hire Purchase (CHP) as a commercial loan product option for the purchase or refinance of equipment. CHP can be applied for by businesses of all sizes, including small, solo-operators, SMEs and large corporations.
CHP is available for a wide range of equipment across many industry sectors. The decision as to whether or not CHP is the best financing option for your business, will be based on your accounting method.
With a CHP, the lender purchases the equipment on behalf of the borrower business and hires the equipment to the borrower/customer for a fixed monthly amount over a fixed time period. The lender retains ownership of the equipment throughout the loan agreement term but the borrower has full use of that equipment.
Equipment CHP Key Features
- CHP loans are based on Jade’s better interest rates.
- Suited to businesses that operate with a accruals accounting method.
- Fixed interest rate for the term of the CHP contract.
- Fixed monthly repayments.
- Balloon may be included but not compulsory – payable when the monthly repayments are finalised. Allowed balloon amounts can vary depending with each lender depending on the goods, term, and age of asset.
- CHP can be arranged with terms from 1 year/12 months to 7 years/84 months.
- The interest component of the monthly payments are tax deductible as normal operating expense.
- GST on the equipment purchase price can be claimed on the next BAS (Business Activity Statement) for businesses registered for GST if you are accrual-based GST. For cash based GST – you only claim GST in proportion to the principle loan amount you pay each quarter.
- GST does not apply to the monthly payments or the balloon.
- Depreciation on the equipment can be claimed in line with Australian Taxation Office guidelines.
Finalising a CHP Contract
At the conclusion of the contract period, when all repayments, interest and balloon has been paid, the ownership of the equipment is transferred to the borrower. Talk to your Jade Consultant about refinancing the balloon if required.
Whether you are in manufacturing, construction, IT, catering, medical finance, waste and recycling, technology, warehousing, Agricultural & Farm Machinery Loans or any other sector, Jade is available to arrange a workable CHP to support your business objectives.
Your Jade Consultant is readily available to explain exactly the details of CHP but always consult with your own finance people for specific advice re your business.
Speak with a Jade Equipment Finance Consultant to discuss CHP finance for your proposed equipment purchase. Call 1300 000 003