Under a Finance Lease arrangement, the financier purchases the asset for the business, and you pay the financier to use the goods. Ownership of the asset only becomes yours when you pay the residual payment at the end of the Finance Lease term.

Terms are from one to five years and repayments are calculated based on the net of GST asset value of the item. There is always a residual value at the end of the term that represents the realistic value of the used item.

The use of this finance product means you get to use the truck for a low monthly amount and is best suited to businesses who report GST on an accrual basis. It can also be used to acquire other assets such as manufacturing equipment, computer equipment and engineering equipment.

When the asset is first acquired by the financier, the GST is paid by them to the supplier of the asset. As the borrower, the business can also claim the GST on the monthly installments with each BAS lodgment.

The business can claim the entire monthly payment as a tax deduction with a finance lease. The residual value must be in accordance with ATO guidelines and will generally be a percentage of the equipment’s purchase price.

To complete a Finance Lease application for a truck without obligation, simply call (02) 4626 6677 to talk with one of our truck finance experts.