Types of Equipment Finance

Operating Lease

What is an Operating Lease?

An Operating Lease (or Equipment Rental) is an agreement between a financier and you the customer where the financier buys the equipment you need and rents it back to you over a fixed term at a fixed price. 
​

Features of a Rental

  • Term: 1 to 5 years

  • Repayment Frequency: Monthly, quarterly, bi-annually or structured to suit you

  • New purchases can be added to existing lease agreements

  • Rental payments are 100% tax deductible as they are an operating expense

  • If you need to purchase new equipment a Rental gives you the convenience to simply add your new purchase to your existing rental or start a separate contract

We recommend you speak with your accountant in regards to tax implications and financial advice. 

 

Chattel Mortgage

What is a Chattel Mortgage?

A chattel mortgage has a similar structure to a fixed rate traditional home loan or mortgage. A finance provider uses the equipment you get as the security for your loan. Chattel refers to the equipment, and mortgage refers to the loan.

Unlike a Hire Purchase or a Finance Lease, an Equipment Loan gives you ownership right away and you then pay off the loan from the income the asset generates in your business.

Why choose a chattel mortgage?

  • You want to own the goods

  • The goods generally have a ‘useful life’ greater than 5 years

Features

  • Term: 1 to 5 years

  • Loan Amount: $5,000 and upwards (subject to credit approval) Repayment Frequency: Monthly, Quarterly in advance

  • Residual or Balloon: available on approved equipment

Payments options

Repayments can be made by Direct Debit only

Other important things you should know

  • With a chattel mortgage, the goods and services tax (GST) inclusive purchase price of the car or equipment is financed and you’re entitled to claim an input tax credit up front.

  • You may also be able to claim interest and depreciation costs depending on how much you use your car or equipment for business use.

  • It’s a good idea to seek advice from your accountant regarding your circumstances and tax impacts.

We recommend you speak with your accountant in regards to tax implications and financial advice.