Leasing

Finance product options

The vehicle and equipment finance market predominantly uses five products to assist clients purchasing assets:

We have described each product to assist you in making the best selection:

Most common vehicle and equipment finance product
Loan term of 12 – 60 months available
Supplier/dealer must invoice Finance Dot Com under prescribed format
Title passes to the client once all payments are made
The GST-inclusive amount is financed
Deposits and /or trade-ins can be used to reduce the loan amount
Loan can be fully amortised (nil residual balloon) or a residual balloon payment can be factored in to reduce the monthly payments.
Other payment structures such as seasonal payments are available
Customer interest rate is fixed for the loan term
The repayments and residual balloon payments do not include a GST component.
For asset depreciation and interest deductibility purposes, the asset is effectively “owned” by the client even though title does not pass until loan maturity.
Clients on an accrual accounting basis for GST can claim the full GST component back at commencement of the loan.*
Clients on a cash accounting basis for GST must claim the GST component back proportionately across the loan term.*
Therefore, clients on a cash accounting basis for GST are likely to be unsuited for a CHP.*
*Independent professional financial and tax advice must be sought to determine all tax and GST issues

Finance Dot Com takes a security charge over the assets to be financed
The assets must be “owned” by the client at settlement
Supplier/dealer must therefore invoice the client for the goods
The Chattel Mortgage may be registered with ASIC and/or the Land Title Office under a Bill of Sale
Loan term of 12 – 60 months available
The GST-inclusive amount is financed
Deposits and /or trade-ins can be used to reduce the loan amount
Loan can be fully amortised (nil residual balloon) or a residual balloon payment can be factored in to reduce the monthly payments.
Other payment structures such as seasonal payments or GST going back in as a rental are available
Customer interest rate is fixed for the loan term
The repayments and residual balloon payments do not include a GST component.
Fees and stamp duty may be included in the loan amount if desired.
For asset depreciation and interest deductibility purposes, the asset is “owned” by the client.
Clients on either an accrual or a cash accounting basis for GST can claim the full GST component when lodging next BAS.*
Therefore a Chattel Mortgage is suitable for clients on a cash accounting basis for GST*
*Independent professional financial and tax advice must be sought to determine all tax and GST issues

True finance lease is rarely used as it offers less flexibility than equity products
Finance Lease can appeal to businesses who wish to avoid capital expenditure
Most commonly used for motor vehicles but available on equipment in some circumstances.
Lease terms of 12 – 60 months are available
Finance Dot Com “rents” the asset to the client who has no title but accepts the residual value risk
Supplier/Dealer invoices Finance Dot Com for the goods
Finance Dot Com can claim an input deduction for GST, therefore the loan amount is the GST-exclusive price of the asset
No deposit or trade-in equity can be applied to a Finance Lease
The residual value is set in accordance with the ATO effective life guidelines
Passenger cars to be leased which will exceed 30,000 kms pa will require a “High Kilometre” letter to be acknowledged by the client in order to use the lower residual values as dictated by the ATO. If a client wishes to lease a vehicle which exceeds the Luxury Car Tax threshold, he/she must acknowledge that, for tax purposes, they are deemed to “own” the vehicle. Standard acknowledgement letters can be provided by Finance Dot Com for this purpose.
For asset depreciation and interest deductibility purposes, the asset is “owned” by Finance Dot Com. The client may treat the monthly rentals as a deductible expense.*
GST is charged and claimed on each monthly rental.*
*Independent professional financial and tax advice must be sought to determine all tax and GST issues

Enables employees to salary-package their cars which can result in tax benefits.*
A Novated Lease is a three-way agreement between an employee (your client), their employer and Finance Dot Com.
The employee signs a finance lease agreement, both the employee and employer sign a Novation Agreement under which the employer agrees to make the repayments out of the employee’s salary.
The credit risk is assessed on your client, not their employer.
If your client ceases employment, the lease may be “re-novated” to another employer, or your client simply begins making the repayments directly.
The exact benefit to the employee (your client) must be independently calculated by a qualified financial advisor taking into consideration your client’s salary and overall tax position, car value, kilometres to be driven, FBT rates and tax rates.
*Independent professional financial and tax advice must be sought to determine all tax and GST issues Pre-approved facilities and large multi-asset facility limits can be applied for with any of the above financial products.