With equipment leasing the lender retains ownership of the goods being leased. As such the lender would claim the GST on the purchase price. GST is then charged on the monthly lease payments excluding the interest portion of the payment. The GST is claimed on the relevant BAS return by the borrower.

There are two types of accounting methods used by an enterprise – accruals and cash accounting. With the cash method, the payments received and payments made by the entity are recorded in the accounts on the date of the transactions. On the other hand, with the accruals method, the accounts payable and accounts receivable are entered into the books or accounts when the invoice is received or issued. Invoice amounts are entered when the invoice is issued to the customer. Bills owing are recorded as debits when received, whether paid at that time or not.

Equipment leasing interest rates displayed by lenders would typically be the best rates available, for new goods and for enterprises with good credit. In order to receive an exact interest rate, an application would need to be processed and quote requested from a lender. Interest rates offered are assessed based on the application details and the goods being acquired. Rates may vary on equipment based type and industry.

The lender retains ownership of goods under lease until all payments are finalised. When all the monthly lease payments are finalised and the residual paid out, the lender transfers ownership to the borrower.

Yes. Leasing is widely used for the purchase of motor vehicles, both new and used, of all kinds. The suitability of a finance product is considered in regard to aspects of the borrowing enterprise. These aspects can include the accounting method, approach to the balance sheet, treatment of GST and tax and general financial objectives.

To select the most appropriate type of finance, enterprise owners are encouraged to refer to their accountant or financial advisor. The decision is based on compatibility and suitable of leasing or another product for the objectives of the enterprise; the method of accounting used; the approach taken by the business to taxation including GST; and the balance sheet approach.

Yes. Lease payments are classified as a business expense by the ATO and are tax deductible. The payments made in a financial year are treated as deductions when the annual accounts and business tax return is prepared at the end of the financial year.

The interest rate on equipment leasing is a fixed interest rate. The rate remains fixed and unchanged for the full term of the lease. The rate does not vary or change when the Reserve Bank makes changes to the official cash rate or when the lender changes the rates offered.

The selection of asset acquisition finance products attract different interest rates which may be used as a gauge as to the cost of the loan. The lowest interest rates usually apply to Chattel Mortgage and Hire Purchase. The interest rate for leasing is typically higher than these but lower than Rent to Own.

Yes. Refinancing is the process of replacing an existing finance arrangement with a new loan. When refinancing is applied for, the enterprise owner may select which is the most appropriate form of finance for their venture and the goods being refinanced.

Being registered for GST is not a pre-requisite to being eligible for commercial loans including leasing. Applicants must hold a current ABN and produce identification.

The minimum and maximum loan amounts for leasing vary across the lending market and will depend on aspects of the individual finance application. Lenders will have their own guidelines as to the minimum and maximum amounts they offer in leasing. The assessment of the application in the approval process will also determine the leasing amount approved for an individual enterprise.

Yes. Leasing is widely used for financing both new and used vehicles of all types. The age and condition of the vehicle will form part of the application approval process and this may influence the interest rate offered, the leasing term and the loan amount approved.

Leasing rates can vary depending on the assets being financed, the industry sector and specifics of the borrowing business. The interest rate offered by a lender for motor vehicles may vary from the rate offered for equipment.

All commercial entities with an ABN may apply for commercial funding facilities. That includes sole traders, self-employed, SMEs and large organisations. The suitability of a particular funding product to a particular enterprise depends on compatibility with accounting practices and objectives.