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Overview of Equipment Loan Products

6 Jul Today's
best rate
Finance Equipment From
5.49 %
*The Interest Rate is calculated on a Secured Loan for business use, effective 06/07/2022 and subject to change. WARNING: The interest rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different interest rate.

Jade Equipment Finance provides a comprehensive range of commercial loan products for business equipment purchases:-

  • Equipment Lease
  • Chattel Mortgage
  • Equipment Rental
  • Commercial Hire Purchase

Each products offers a range of benefits but all include:-

The key differences are:

  • How GST is treated
  • Off or on balance sheet asset/liability
  • Ownership of the asset over the time of the loan
  • Ownership of the equipment at conclusion of the loan
  • Tax deductible amounts
  • Asset depreciation

The decision as to which loan product is best suited to your equipment purchase is not determined by what you are purchasing as all products are available for all types of business equipment acquisitions.

The deciding factors are based primarily on your accounting methods, treatment of GST, tax deductions, asset depreciation and balance sheet plan.

Your Jade Equipment Finance consultant is available to discuss the differences between loan products but we advise you seek advice specific to your business from your accountant.

Equipment Lease

  • Fixed interest rate for the full term of the asset lease.
  • Fixed loan term.
  • Lease terms are normally from 12 months/1 year up to 84 months/7 years
  • Fixed monthly repayments.
  • 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 the lender can claim back the GST, the amount financed in the lease is the equipment purchase price ex GST.
  • GST is charged 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.

Chattel Mortgage

  • Fixed interest rate for the duration of the loan
  • Fixed monthly repayments.
  • The interest proportion of the monthly repayments are usually fully tax deductible as a business expense.
  • The total amount of GST on the equipment price may be claimed on the ensuing Business Activity Statement.
  • Depreciation on the equipment is accounted as a tax deduction at end of financial year.

Equipment Rental

  • Fixed interest rate.
  • Fixed monthly repayments.
  • Flexible terms of up to 6 years/72 months.
  • ‘Off balance sheet’ item. The repayments are accounted for as an operating expense but the asset/liability does not appear on the borrower’s balance sheet.
  • GST can be claimed by the borrower on the monthly repayments. (If business is registered for GST)
  • Monthly repayments are tax deductible as a business expense.

Commercial Hire Purchase (CHP)

  • Suited to businesses that operate with a accruals accounting method.
  • Fixed interest rate.
  • Fixed monthly repayments.
  • CHP can be arranged with terms from 1 year/12 months to 7 years/84 months.
  • 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 on accrual. 
  • GST does not apply to the monthly payments or the residual.
  • Ownership of the asset is with the lender and normally transferred at completion of the loan.

Speak with a Jade Consultant to discuss a financing solution for your proposed equipment purchase. Call 1300 000 003

EquipmentLoan Calculator

Making use of this calculator is established on the individual's understanding as well as undertaking that the outcome showed does not imply a lending quote; it does not illustrate an application for any type of financing has been lodged; it is not a suggestion that any type of lending application has actually been approved. The format of this tool does not take into account particular details pertaining to any kind of certain individual financing application or any type of loan provider fees as well as costs. It is formatted to supply a basic result based on basic details and also amounts only.
After lodging a formal finance application, the quote and payment amounts that you may possibly be provided might vary from the finance quote accounted by this tool.
The tool is not appropriate for calculations on financings that are established on a rate of interest just basis. The format is purely established to compound the calculated interest rate for a set time period based upon the values entered by the site visitor.
The calculator is not intended as a device for finance decision-making. Users that need finance advice must choose a specialist financial consultant in regard to their personal circumstances. To apply for finance and acquire a quote based on your individual requirements, the individual needs to call Jade and have their personal application assessed by one of our Jade experts.

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