Commercial Hire Purchase which is also termed Asset Purchase is a finance agreement between the bank and the customer where the bank allows possession and full use of the goods/equipment.  Upon payment of the final instalment the customer (the hirer) then assumes ownership of the goods.

Advantages:

• Commercial Hire Purchase can be tailored to suit the individual needs of clients

• Finance terms up to 7 years

• Monthly repayments, structured repayments, seasonal or irregular repayment arrangements

• Repayments and interest are fixed for the term of the loan

• Finance can be arranged for the full cost of the goods including the GST

• The ability to claim the Input Tax Credit via the Business Activity Statement if borrower is registered for GST by way of the accrual accounting method

• Full ownership of the goods upon completing the final payment

• Finance can be for either new or used equipment

• A deposit and/or trade-in proceeds can be introduced into the finance transaction

• Balloon payments can be structured as a final payment to reduce monthly, seasonal or irregular payments

Benefits to the borrower:

• Fixed repayments and interest allow the borrower controlled cash flow management

• Interest on agreement and depreciation on goods are tax deductable

• Preserves working capital for business growth

• Finance term can be tailored to meet the life of the goods