Whether you’re buying a car, IT, or equipment, hire purchases can work to grow your business.
What is a hire purchase?
A hire purchase is a flexible and cash flow neutral finance solution for business looking to eventually own cars, equipment, or long-term assets. Repayments can be tailored to your business cycle. You can reduce repayments using a balloon payment (residual value) payment, due at the end of the loan term. A hire purchase doesn’t require a deposit, and all repayments are on the books as operating expenses. As a business loan, you can also finance maintenance and servicing as part of the hire purchase agreement, with an amount more than 100% of your asset’s value.
Accounting and tax benefits?
With all hire purchases, ownership of the equipment or car rests with the lender until the end of the loan term. This means you are effectively hiring or renting the asset which means repayments are classified as a business operating expense. Your lender may claim GST, depreciation, and interest paid on the loan and pass it on as savings to you. This may suit businesses that require off-balance sheet accounting. Our experienced consultants have access to the best finance products and rates. Savvy will make it simple and easy for you to make an informed decision.
Getting you approved with your Hire Purchase
We are accredited with the most reputable commercial lenders in Australia giving you a fair choice to compare.
Tips for saving more on hire purchases?
A step-by-step guide to making the most of a hire purchase
Figure out what your business needs
Though not as common as their fixed counterparts, you can get a variable rate car loan. These are harder to budget for due to their rates being pegged by the official cash rate set by the RBA. You could experience reduced repayments if the market goes down; but increased payments if the rates go up.