Commercial Hire Purchase

The main features & benefits of a 'Commercial Hire Purchase' are

• Definitely one of the most commonly used finance packages used today!
• As the name clearly says commercial hire purchase, which involves the client/customer hires the goods or vehicle from the financier of lender for a fixed monthly repayment over a set period of time, usually being up-to 60 months.
• The client/customer agrees to pay the monthly repayments to the financier, and the financer therefore agrees that the client/customer has the use of the goods/vehicle for the term of the contract, but is not the owner of the goods of vehicle, until it is fully repaid.
• The monthly repayments, interest rate and term are all fixed
• You can include a cash deposit and or trade in to reduce the loan amount and therefore monthly repayments as well!
• Clients/customers who are registered for GST can make a claim of the GST in the vehicle price
• The security that the financier takes are the goods/vehicle in question only
• This type of lending, CHP, mostly suits the sole trader, companies and partnerships, who have been set-up on an accruals basis by their Accountant. Therefore businesses using accruals accounting system can claim the GST as a lump sum on their next BAS statement
• On the portion used for business purposes, the hirer/client/customer can claim depreciation and is capped at the depreciation limit being $57,466) and the interest charges on the contract as a tax deduction.