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Asset Lease


An Asset Lease, or Finance Lease, is a commercial finance product enabling the customer to have the benefits of ownership and use of the asset, whilst the financier retains the actual ownership of the asset.

How does an Asset Lease work?

The financier purchases the asset on behalf of, and as instructed by, the customer, who then leases the asset back from the financier, paying a fixed monthly payment. At the end of the lease the customer then has the option to either purchase the asset from the financier (at an amount agreed upon at the start of the lease), trade the asset in for a new one and take out a new asset lease, or continue on with the lease with any residual amount (again, agreed upon at the start of the lease).

Benefits to Business

  • Fixed interest rate and monthly lease rentals.
  • Flexible lease terms from 1 to 5 years.
  • Lease instalments tailored to match your business cash flow.
  • No capital outlay (upfront deposit) required.
  • Fully tax deductible to the extent the asset is used for business purposes.
  • Ability to make advance instalments.
  • Rental instalments are structured on the asset purchase price ex GST.


GST

  • As the financier is the legal ‘owner’ of the asset, they claim the GST on the initial purchase of the asset. Hence the lease term is structured on the asset purchase price EX GST.
  • GST is charged on both the monthly rental and the residual value at the end of the lease.
  • GST registered customers can claim some or all of the GST contained in the monthly rentals and residual value as an Input Tax Credit in their BAS.


For more information on Asset Lease please contact us.