Under a hire-purchase agreement, management purchases equipment by instalments. This is where the lender buys the equipment at the borrower’s inclination. Thus ownership is only passed to the borrower at the end of the contract, therefore making any repayments being termed in the nature of hire or rental costs.
This has the benefit of not owing the full purchase price at the outset or having to pay a significant residual payment. Also, since the interest rate is fixed for the contract’s term, this means repayments can also be fixed.
The Commercial Hire Purchase (CHP) agreement is simply a contract where the financier (the ‘owner’) allows you (the ‘hirer’) the right to possess and use equipment in return for regular payments.
Upon completion of the CHP and following your final payment, full vehicle ownership is transferred to you.
Benefits of Commercial Hire Purchase
Flexible contract terms.
Fixed interest rates.
Fixed monthly lease rentals.
Costs are known in advance.
Deposit (either cash or trade-in) may be used.
A residual can be applied to contract, lowering monthly payments.
Tax deductions can be claimed for depreciation of the equipment.
Customers registered for GST can claim the GST in the equipment’s price.
Ability to structure your repayments to suit cash-flow trends.
Tax Implications of a Commercial Hire Purchase
Where the hirer is registered for GST, they can apply Input Tax Credits to claim back the GST contained in the purchase price of the equipment. Businesses using Accrual accounting can claim the GST as a lump sum on their next Business Activity Statement (BAS), whereas those using Cash accounting can claim the GST in instalments over the term of the contract.
I have worked with the team for a few months now.Absolutely great team to work with! Guided me with the best available options in the market.
Many thanks to the Team at Finance and Mortgage Solutions which helped me to secure my bank loan without any fuss. Their fully secured digital technology made every part of the loan process very easy and hassle free.
Madhu, Arnab and team have helped us with refinancing our mortgage with so much ease. They understood our concerns and were able to tailor a solution that was ideal for our situation. They kept us upto date at all times and were able to quickly resolve any problems that arose. Their wealth of knowledge across mortgages as well as finance overall has been immensely valuable. Anyone looking for advise and tailored solutions especially families, new migrants or someone who’s just confused with the options available should give this team a call.
I joined as a mentee under Madhu Chaudhuri from Finance and Mortgage Solutions in 2017, and worked under her supervision till March 2021. I have learnt Residential and Commercial lending while being mentored by her.
Now I am running my own Mortgage broking business successfully since I April 2021.
The weekly classes and networking sessions run by Finance and Mortgage solutions were quite helpful to keep me updated with latest policies of the Finance Industry.
I want to express my gratefulness that I had an opportunity to work and learn working with Madhu Chaudhari. She is an amazing mentor who has made a substantial change in my career over the past few years. She fully understands the needs and inspires new brokers to bring out best in them.
She has tons of experience & immense knowledge in the finance & mortgage industry.
It’s been a pleasure working with Madhu. She carefully analysed our situation and looked into all areas of our outgoings and ensured we maximised our savings to be able to save for our future.
She is really patient and her advice on various fronts of our finance structure helped us immensely. She is a walking encyclopaedia of all things finance.
Definitely will recommend her to everyone who needs a great adviser... She has certainly made a friend for a lifetime...
As a first home buyer, I was really facing so much issues. The advice, support and service Finance and Mortgage Solution that are giving me are simply amazing. I highly recommend FMS for mortgage related consultancy.
Madhu was my mentor for 2 years from November 2016 to June 2018. She was available during working hours for any questions and she believes in helping her mentees to learn by working through scenarios and arriving at the approriate solutions. My skills in developing appropriate scenarios to the unique financial situation of a customer were enhanced during the mentorship. How to talk to the assessors and how to approach a BDM for a solution were skills that were honed during this period.Finally pitching the loan to the customer and compliance training were addressed in great detail. Madhu is very helpful and extremely knowledgeable. I would recommend her anytime as a mentor for any person wishing to become a Broker.
Madhu and team are thorough professionals and am really happy with the advise they provided to make informed decisions.
I have gone again with Madhu for the construction loan. She was able to secure us an excellent deal after going through with several lenders. Appreciate thier customers first approach and commitment. Thanks a lot again.
I cant recommend much more than this. Well organised, good follow up, great mentorship and guidance throughout. Recommends based on our specific needs and answers to all our questions patiently and responsibly!
I recently got a home loan approved from Finance & Mortgage Solutions. I cannot thank them enough for their help excellent service and highly recommend especially Madhu and Arnab without them it wouldn't have been possible . Thanks 👍.