Equipment Finance

The customer takes ownership of the asset.

The financier takes their interest over it by way of mortgage.

Once the contract is completed, the security interest is removed, giving the customer a clear title to the asset.

Businesses registered for GST on a cash basis may claim GST in full in their next Activity Statement.

Gives certainty of ownership and the ability to contribute a deposit.

The financier purchases the asset on behalf of the customer and then hires it back over an agreed term.

After the residual is paid, the customer assumes ownership.

Gives some certainty of ownership at the end, but is generally less tax effective than a Chattel Mortgage option.

Currently not a widespread product option.

The financier retains actual ownership of the asset with an option for the customer to purchase at the end of the term.

The customer only finances the purchase, excluding GST.

A good option when updating equipment or vehicles regularly.

There may be legal or accounting reasons for not requiring ownership of the asset.

You will not own the asset.

Commonly referred to as being “Off Balance Sheet”, you can simply return the goods at the end of the term.

Usually, this structure is delivered at a higher cost.

A good option when you are turning over equipment regularly, need flexibility and want one simple repayment.

The taxation treatments associated with ownership of equipment can be unique to your circumstances, and we can support you in getting accounting advice. For example, this may assess whether the benefits associated with asset ownership of equipment outweigh any benefits of a total deduction of payments through leasing.