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Commercial Hire Purchase

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How Does Commercial Hire Purchase Work?

A Commercial Hire Purchase occurs when a financier or lender agrees to purchase vehicles, machinery or other commercial equipment on behalf of the customer (a business, company or individual), and hires it back to them over an agreed period of time specified in the finance agreement.

While the borrower/customer has full use of the purchase over the period of the contract, they are not the owner. Only once the item has been fully paid off over the finance term, does ownership transfer over to the borrower.

Because this is 'hire with intent to purchase', you are able to claim any depreciation of the asset as well as the interest on repayments as a tax deduction. You may also be able to claim any GST on the purchase of the item.

This kind of equipment loan is exclusively for commercial purposes and is mostly used for the purchase of work vehicles.

Benefits of Commercial Hire Purchase?

  • You can tailor your payments by selecting the term, up-front deposit and final instalment amounts.
  • Interest charges and depreciation can be tax deductible
  • Input Tax Credit can be placed on the GST component of the purchase, including the GST applicable to term charges and fees under the finance contract.
  • The finance is secured against the purchase, allowing for lower interest rates.

Need Business Finance? Apply for a Hire Purchase

Gold Coast Finance has access to a large number of lenders, from the major national banks to the non-conforming and second tiered lenders. Also offering invoice finance to small and medium sized businesses. 

Speak with our Equipment Finance specialists today on 07 5532 6951 and let us arrange a quote or apply for a loan online now.

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*Clients should seek independent advice regarding the most suitable commercial product for them