Why should my business apply for a hire purchase?
Business gains many tax breaks and other incentives. GST paid on the asset as well as interest and depreciation is claimable; either are passed on by the lender or claimed by your business. You are also eligible for the instant tax write-off.
What is a balloon payment?
A balloon payment, or residual value payment, is a part of the loan set aside for payment at the end of the loan term. This has the effect of reducing regular repayments. When the loan term is up, you can pay out the balloon, refinance the balloon, or in some cases, trade in your equipment or car if it meets certain conditions.
What is meant by hire purchases being “cash-flow neutral?"
This means your business will not have to dip into savings or cash reserves to immediately fund the hire purchase. You can borrow 100% of the asset’s value, and even cover expenses such as registration, insurance, training, installation, and maintenance.
Frequently Asked Questions
Can’t find the answer you’re looking for? Reach out to our customer support team.