Under a Finance Lease structure, the lender purchases the equipment you require, then leases or rents it back to you in return for a series of rental payments over an agreed term. 100% finance is provided and therefore no deposits are permitted.
The monthly repayment/rental is fully tax deductible. The interest rate is fixed for the term of the finance agreement.
A Residual/Final value is set at the end of the finance term which must agree with ATO guidelines.
The lease repayment/rental includes GST.
Legally, the equipment is returned to the lender at the end of the finance term however in reality the lender generally invites the business to acquire the goods at the residual value. The lender may also give you the opportunity to refinance the residual value and extend the term of the finance contract for an agreed term subject to a satisfactory credit assessment.
