Equipment Loans

What you should know

When it comes to equipment loans, at Australian Home Loans Made Easy gives you several financing options to choose from: hire purchase, chattel mortgage or novated leasing.

Hire Purchase

• is a rental agreement
• the goods automatically become yours once all terms of the agreement have been completed
• ownership of equipment rests with us until the final payment is made
• for tax purposes you can claim equipment depreciation and interest paid, against your business income.

To reduce your rental commitment, you can pay an upfront deposit or trade-in. Alternatively, you may choose to structure your rentals in such a way as  to clear the debt in full over the term of your agreement.

Whatever the requirements, Australian Home Loans Made Easy can design a repayment schedule to suit you.

Chattel Mortgage

• is a charge over goods to be financed
• allows businesses who operate under a ‘cash accounting’ basis to claim the full tax credit immediately
• loan structures can be custom-made on a similar basis to a Finance Lease

Finance Lease

• is a form of rental agreement under which you lease your nominated asset for an agreed term and rental amount
• a residual value is set to reflect the equipment’s value at the end of the term
• goods are owned by the finance company, but the lease rentals are tax deductible to you, as long as the goods are used in connection with producing assessable income
• at the end of the lease you can make an offer to purchase the equipment from the finance company, trade it in on a replacement, return it, or extend the lease for a further term

A Novated Lease is effectively an agreement between the employee (a lessee), their employer and the finance company (the lessor).