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Under a Commercial Hire Purchase, the hirer contracts
to pay hire charges for a fixed period at the end of
which the legal title to the property passes to the
hirer. Until all the hire charges have been paid, legal
title remains with the financier.
The payments of a Hire Purchase can be structured
by varying the level of deposit and/or making balloon
payments either during or at the end of the Hire Purchase
Agreement.
A Hire Purchase provides you with the ability to purchase
the equipment at any time during the term of the agreement.
Unlike a Finance Lease where the full amount of the
lease rental is tax deductible, only the interest component
of the payments and the depreciation on the goods are
tax deductible.
Benefits of a Hire Purchase:
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Preserve the existing cash and credit facilities
of your business. Your funds can either be invested
in more productive areas of your business, or maintained
to take advantage of an unexpected business opportunity.
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Specific asset security. You do not have to tie
up additional business and/or personal assets.
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Ability to hire less than the total invoice price
of the goods by way of deposit.
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Fixed cost contract. A fixed rate and term make
for accurate budgeting and also provides a hedge
against inflation.
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Hire charges can be specifically structured to
suit your business cash flow.
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The interest component of the payments and the
depreciation on the goods are tax deductible if
the asset is used to generate assessable income.
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Balloon Payments can be predetermined.
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