Commercial Hire Purchase (CHP)

About Hire Purchase

A commercial hire purchase (CHP) is a particular type of finance used by businesses for the purpose of purchasing a new or used business equipment or machinery.

Hire Purchase is a similar agreement to that of a Chattel Mortgage, only in that the lender holds title of the security until all monies owing are paid. With Hire Purchase, however for tax purposes you can claim depreciation, running costs and interest paid, against your business income. You may also be able to claim the GST component of your purchase in your next BAS Statement depending on how you remit your GST (cash or accrual) always seek advice from your accountant in regard to this.

You also have the option of including an up front deposit or trade-in to reduce your rental commitment, while a balloon payment may also be set at the end of the term (much like a lease residual) to acknowledge the equipment end value.   Alternatively, you may choose to structure your rentals to clear the debt in full over the term of your agreement (fully amortised).

Hire Purchase - Benefit

Interest charged and depreciation of the equipment are tax deductible Minimal or nil capital outlay is required and cash flow protected Terms can be flexible and fixed repayments make for easy future budgeting After full payment of the hire purchase agreement, ownership of the goods is transferred to you. You have the option to make payments with or without a balloon payment at the end of the term.   EzeHire offers a range of finance options for equipment technology, office equipment or machinery purchases including, hire purchase, leasing and rental finance. For more information or to lodge an enquiry click here info@ezehire.com.au   or call 1300 789403 to speak to one of our consultants. <<SCRIPT_0000000702>> GST and Hire Purchase Agreements GST and Hire Purchase Agreements - For income tax and now GST purposes, a hire purchase agreement is treated very differently to a finance or operating lease.