Car Finance / New or up to 3 yrs old

Commercial Hire Purchase (CHP) / Asset Purchase

  • Term is usually up to 60 months but can be increased for larger acquisitions
  • Payment and terms can be structured to match revenue periods for seasonal businesses
  • Can be structured with or without a final balloon payment
  • Only the interest component of the repayment is tax deductible (clients should seek independent tax advice)
  • Depreciation is claimable by the borrower (clients should seek independent tax advice)
  • Subject to qualification the GST component of the purchase price may be claimable as an input tax credit next BAS for companies that complete their BAS on an accrual basis

Finance Lease (Leasing)

  • Term is usually up to 60 months
  • Payment and residual values generally reflect the depreciable life of the asset
  • Repayments are completely tax deductible
  • Depreciation is not claimable by the borrower
  • The amount financed excludes the GST component
  • GST is added to each repayment

Chattel Mortgage

  • Similar structure to the CHP in the treatment of depreciation and interest
  • Utilised by those companies that do not qualify to claim the upfront input tax credit for the GST using CHP
  • Subject to qualification the GST component of the purchase price may be claimable as an input tax credit next BAS for companies that complete their BAS on an cash basis
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