:: Leasing and Hire Purchase

Leasing & hire purchase offer two of the most flexible and convenient forms of business finance available today. 

Leasing & hire Purchase finance enables you to purchase vehicles, equipment or plant without typing up large amounts of your working capital. As your mortgage & finance professional Shire First Mortgages can help you structure leasing or hire purchase finance to suit you and your cash flow situation. You may also gain tax advantages if the goods are dedicated to generating a business income.

The terms of leasing & hire purchase finance are set at the beginning of the contract so you know exactly what your regular repayments will be. In most instances you will not be required to pay an initial deposit.

Under a hire purchase agreement the funder buys equipment on your behalf. You enter into an agreement to repay the cost of the goods, plus interest. If you wish, you may pay a deposit towards the purchase price. Once you have repaid the cost of the goods plus interest, ownership is automatically transferred to you.

GST will apply to either the principal component or the full amount financed depending on the agreement and may be paid upfront or financed on the agreement. GST that has been paid may be claimed as an input tax credit.

With a lease agreement, the funder buys equipment on your behalf and “rents” it to you. You must finance 100% of the purchase price. You make a regular payment over a term usually ranging from 1 to 5 years.

If equipment is used to generate business income, the entire rental payment may be tax deductible. At the end of the lease term, you may offer to purchase the goods for a pre-determined residual value.