When financing business vehicles or equipment, common structures include chattel mortgage, finance lease and hire purchase. Each structure works differently.
What is a chattel mortgage?
A chattel mortgage allows a business to purchase an asset while the lender takes security over it. The business generally owns the asset from the start.
What is a finance lease?
Under a finance lease, the lender owns the asset and leases it to the business for an agreed term. The business may have options at the end of the term.
What is hire purchase?
Hire purchase allows the business to use the asset while making payments. Ownership typically transfers after the final payment.
Which option is best?
The right structure depends on business cash flow, tax treatment, GST position, ownership preference and long-term asset strategy.
Tax considerations
Tax outcomes can vary depending on structure and business circumstances. You should speak to your accountant before choosing a finance option.
How Nine Fincap can help
Nine Fincap helps businesses compare asset finance structures for vehicles, equipment, machinery and commercial assets.
Buying a vehicle or equipment? Compare Vehicle Finance Options with Nine Fincap.
Disclaimer This article is general only and is not tax advice. Speak to your accountant before selecting a finance structure.