Asset Lease

An Asset Lease enables the customer to have the use of their business equipment and the benefits of ownership, while the financier retains actual ownership of the equipment.

• • How does it work?
  • Benefits
  • Tax implications
  • Other options
  • More information

How does an Asset Lease work?

The financier purchases the equipment on behalf of the customer, who then pays the financier a fixed monthly lease rental for the term of the lease.

At the end of the lease the customer can either pay a residual on the lease and take ownership of the equipment, sell the equipment or re-finance the residual and continue the lease.

Benefits of an Asset Lease

• • Flexible contract terms
  • Fixed interest rates
  • Fixed monthly lease rentals
  • Costs are known in advance
  • A residual can be applied to a lease, lowering monthly payments
  • Your equipment does not sit "on your books" as an asset/liability
  • Tax deductions for the lease payments can be claimed
  • Ability to make advance lease payments for tax deduction or cash-flow purposes

Tax implications of an Asset Lease

GST is charged on the monthly lease rental and on the residual value at the end of the lease. Where the customer is registered for GST, they can claim some or all of the GST contained in the lease rental and the residual value as an input credit on their next Business Activity Statement.

The customer can claim the lease rentals as a tax deduction.

Other options

If you are considering an Asset Lease, you may also want to take a look at Commercial Hire Purchase, Chattel Mortgage and Equipment Rental as other possible finance options.

Want to know more?

If you have any questions, would like to know more about an Asset Lease for your business equipment, or would like to get an equipment finance quote, please complete an online enquiry or call us on 02 9037 2768.