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Commercial Hire Purchase | Business Lending Option

19 Dec Today's
best rate
Finance Equipment From
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*The Interest Rate is calculated on a Secured Loan for business use, effective 03/02/2023 and subject to change. WARNING: The interest rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different interest rate.

Compare Commercial Hire Purchase (CHP) Interest Rates Against Other Loan Products

This kind of commercial loan is one of several options in selecting financial options for their asset acquisitions. In this comparison table, you can see the interest rates that we are currently achieving for a vast selection of lending products. Use the calculator to compare a deal with other lending types for your purchase. Enter the data around your proposed loan and repayment estimates will be displayed alongside each lending type.

Loan Amount
Loan Term
New Equipment Loan
2.79% Starts At
$569.75
Monthly repayment
Used Older Secured Equipment Loan
4.50% Starts At
$612.5
Monthly repayment
Business Loans - Unsecured
7.99% Starts At
$699.75
Monthly repayment
Business Loans - Secured
2.95% Starts At
$573.75
Monthly repayment
Overdraft - Non Bank
9.95% Starts At
$748.75
Monthly repayment
Chattel Mortgage
2.79% Starts At
$569.75
Monthly repayment
Operating Leases
4.60% Starts At
$615
Monthly repayment
Commercial Hire Purchase
2.79% Starts At
$569.75
Monthly repayment
Rent To Own
9.95% Starts At
$748.75
Monthly repayment
Loan Product Interest Rate
Starts at:
 Monthly Repayment
New Equipment Loan 2.79%
$569.75
Used Older Secured Equipment Loan 4.50%
$612.5
Business Loans - Unsecured 7.99%
$699.75
Business Loans - Secured 2.95%
$573.75
Overdraft - Non Bank 9.95%
$748.75
Chattel Mortgage 2.79%
$569.75
Operating Leases 4.60%
$615
Commercial Hire Purchase 2.79%
$569.75
Rent To Own 9.95%
$748.75
Get a free quote

Disclaimer: This interest rate table is provided purely for the purpose of comparing interest rates currently achievable on different types of commercial lending. Using the chart does not imply an application has been approved or an offer made. Lender and broker fees and charges have not been included in their entirety in the calculations. Using this device is not an application form. Any offer you are made by a lender may vary in terms of the interest rate and repayment amount compared with the data displayed.

What Is A Commercial Hire Purchase?

Commercial Hire Purchase, usually referred to as CHP, is a very popular form of commercial loan as it suits many businesses and the purchase of many goods and assets. The business loan structure is relatively straightforward with fixed elements and a range of tax and other benefits.

Due to the flexibility and popularity of CHP, all major banks and many lenders actively offer it as a form of business lending. Finding the right lender and sourcing the best business interest rates can involve a time-consuming process.

To save you time in sourcing the best CHP deal, we deliver you quick connection and access to many lenders with a short-list, hand-selected by our finance experts as best-fits for your requirements.

  • Large Selection of Leading Lenders
  • All Major Australian Banks
  • Specialist Lenders to Suit All Sectors
  • Specialist Equipment, Motor Vehicle and Marine Lenders
  • Professional Lending Brokers to Streamline Your Financing

CHP Explainer

Commercial Hire Purchase involves a contract between the lender and borrower where the lender purchases the goods/assets and essentially hires those goods back to the borrower at a monthly hire or repayment fee. The borrower has use of the goods from the time of the purchase and finalisation of the loan and is responsible for all costs and expenses for those goods over the loan term.

Wide Range of Goods and Asset Purchases

CHP Features

CHP is a quite a flexible form of lending as it can be tailored to suit individual commercial requirements to ease cash flow and work positively towards achieving financial goals.

  • Lender purchases the goods and holds title of ownership until the borrower finalises all payments.
  • Borrower has used of the goods from time of purchase and responsibility for ongoing expenses. For cars, trucks and boats that includes rego, insurance, servicing etc.
  • Simple loan format – fixed interest rate, fixed loan term, fixed monthly repayment, balloon.
  • Loan term dependent on the lender and the particular goods. Some lenders have minimum and maximum CHP terms.
  • Optional balloon payment. This is usually represented as a percentage of the purchase price of the goods which is not covered in the monthly repayments but due for payment at the end of the loan term. When due, the balloon may be paid as a lump sum or refinanced with a new loan.
  • Suitable for new and used goods subject to individual lender guidelines in relation to the age of used goods.
  • Suits cash or accrual accounting method.
  • GST on the purchase price of the goods can be claimed on the ensuing BAS.
  • As GST is claimed at the outset, it is not charged or claimable on the principle component of the repayments. GST is not charged on interest. GST is charged on fees and charges.
  • Only the interest component of the CHP repayment each month is tax deductible.
  • Balloon is not tax deductible.
  • Asset depreciation is in line with ATO guidelines.

CHP Suits Many Businesses, All Industries

Commercial organisations should consult with their accountant in determining if CHP is the finance type that will deliver the greatest benefits to their individual operation for that particular purposes. But in general, all types of structures and sizes may be eligible for CHP

  • Small Businesses in Australia 
  • Family Operations
  • SMEs
  • Family Trusts and Unit Trust Operations
  • Sole Traders
  • Partnerships

Sourcing a Commercial Hire Purchase for Your Purchase

Our commercial loan company has done a lot of the hard work for you by bringing together a large number of banks and lenders in our hub and giving you direct access to a shortlist of lenders that match your requirements.

Save time, save hassle. Just connect with us for banks, brokers and lenders to request a quote for your loan.

Connect with us for lenders that may assist you with a CHP quote.

Commercial Hire PurchaseCalculator

Interested in Commercial Hire Purchase for your upcoming acquisition? Use our loan calculator to generate repayment estimates and plan how you may like your deal structured in regard to loan term and balloon amount. Great device for comparing repayments on different makes and models. Contact us for a specific quote by phone or request a quote online.

Disclaimer: Using this calculator does not indicate a loan application, any approval of an application or any quote for. All fees and charges applicable to by individual lenders may not have been allowed for in the computation settings. The repayments and interest rate that you may be offered may differ from the results derived. To be used as a guide only.

Finance Calculator Disclaimer

Commercial Hire Purchase FAQs

This lending type is also referred to simply as Hire Purchase by some banks and lenders. This type of commercial finance facility has historically been quite a popular form of finance and suits many businesses for a wide range of business equipment and other purchases. To expand on the information provided on the dedicated webpage, please review these more specific answers to direct questions. For a quote or for further information, contact our team for individual assistance.

Is CHP like hiring equipment?   

No, Commercial Hire Purchase is not the same concept as hiring equipment or cars. Hiring or renting cars and equipment is typically undertaken on a short-term basis where you use the goods which are owned by another commercial operation. There is no intention or implication of ownership by hiring the goods. CHP is a form of lending where the borrower repays a loan to a lender with the goal of acquiring ownership of the goods. The lender actually retains ownership of the goods during the loan term and under a hire agreement, the borrower pays a monthly payment to work towards ownership. When all hire payments for the agreed term and any balloon amount is paid in full, the lender signs ownership over to the borrower.

What purchases is Commercial Hire Purchase used for?   

It can be used to purchase a wide range of commercial assets. These include cars used in the commercial operation, other vehicles such as utes and vans, all types of trucks, heavy equipment, yellow goods, plant and machinery, general office equipment, medical devices and equipment, construction and mining equipment, manufacturing equipment and other assets used across most industries. CHP is a secured type of loan so it is suited to physical assets and goods. It is not a type of lending for general cash flow support and other intangible commercial requirements. For those purposes other lending facilities such as an Unsecured Loan or Lender Overdraft would be more appropriate.

What business set-ups suit Commercial Purchase Hire Finance?   

Commercial Hire Purchase can suit many types of commercial operators. It may be used by SMEs, family operating enterprises, partnerships, sole traders, large corporations, owner operators and others. Commercial operations across all industry sectors may find CHP the suitable lending product for their purchase. The decision around whether CHP or another lending products such as Leasing or Chattel is the most suitable loan for your organisation should be made in consultation with your accountant. Those that do not meet the standard eligibility criteria for lending as established by banks and lenders can apply for a Low Docs CHP or No Docs CHP

Is the interest rate the same for CHP and other loan types?   

The interest rates on commercial lending facilities vary across the range. The interest rate for CHP is different from Leasing and Rent-to-Own but may be similar to the rate applicable to Chattel Mortgage. The interest rate on CHP is not the same as the rates general commercial loans, overdrafts and other specialist forms of lending. The interest rate offered on CHP varies from lender to lender and can also vary across different industries and for different categories of equipment. Lenders assess loan applications individually, taking into account both the applicant and the asset being acquired in arriving at an interest rate and loan offer. Refer to the interest rate comparison table to see the different rates on different loans.

What is a balloon payment?    

It is a percentage of the loan amount requested that is set aside for payment at the end of the loan period. It may be stated as a percentage of the loan amount or purchase price where 100% of the purchase price is financed, or stated as a set dollar value. Having a balloon included in a CHP loan contract is not compulsory, it is purely a choice made by the borrower. As it is financed, interest does apply but the principle is not repaid until the end of the loan term. When all the scheduled CHP repayments have been finalised, that is at the end of the CHP lending term, it is due for payment. A larger balloon will decrease the monthly repayments while a smaller balloon will increase repayments will less payable at the end of the term. Commercial organisations have options for paying out a balloon including from their trading equity, when trading in the goods and through refinancing where approved.

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