Compare Interest Rates on Rent to Own With Other Loan Types
Deciding which loan type is the most appropriate for your commercial operation and the equipment you are purchasing should involve a discussion with your accountant. But to assist in your initial lending planning, you can use our interest rate comparison calculator to generate repayment estimates on your equipment purchase for different lending products. The table shows the interest rates for a range of finance facilities in our portfolio.
What Is Equipment Rent to Own?
Rent to Own is a form of business loan which, as the name implies, allows a commercial enterprise to rent the equipment in order to achieve ownership. Some banks and lenders refer to this type of loan as an Operating Lease.
It is quite widely utilised so many banks and lenders offer the Rent to Own option to finance equipment purchases. We can cut the time it takes you to source a cost-effective Rent to Own Equipment deal. We’ve brought together many banks and lenders that offer this type of loan in our loan hub. To access these lenders directly, just make contact with us with your commercial requirements and we’ll send you the details of lenders that match your criteria.
Certain industries and certain types of equipment are quite specialist in nature. Dealing with lenders that fully understand your sector and have experience in providing lending, for the type of equipment you are acquiring, may result in a much better loan offer.
- All major bank contacts
- Direct access to specialist lenders
- Specialist lenders in your industry
- Contact with business loan brokers to negotiate your deal
Rent to Own Features
- Rent to Own loans are an off balance sheet finance facility. The asset is entered on the balance sheet of the lender so it is ‘off’ the balance sheet.
- This type of loan is often used to improve balance sheets as the equipment does not appear as an asset/liability.
- The lender essentially purchases the equipment and the borrowing business rents the equipment from the lender for a specific time period at a set monthly rental payment.
- From the settlement of the purchase and loan agreement, the borrower takes possession of the equipment for use in their business.
- The borrowing business is responsible for the ongoing expenses associated with the equipment during the course of the rental-loan term.
- The rental agreement is usually established on a fixed interest rate.
- The rental term is fixed. The length of the term may be up to 6 years but is usually determined by the lender based on the condition or working life of the equipment.
- A buyback price may be incorporated into the rental agreement. Alternatively the borrower may negotiate an appropriate price to buy the equipment from the lender at the end of the rental-loan term.
- The monthly rental fee is fixed and treated as an operating cost and as such, tax deductible.
- GST is charged on the monthly rental payments and can be claimed by the borrower if registered for GST.
Suitable Equipment For Rent To Own
A wide range of equipment is suited to Rent to Own. The determining factor as to whether or not this is the most suitable loan facility for your business will be aspects of your commercial set-up. Referring to your accountant for advice in this regard is highly recommended.
Some lenders will have limitations on what equipment loan they will approve, predominantly in terms of age and condition.
If you are seeking a loan on used equipment, use our services to compare the market with many lenders and banks that will be best suited to your requirements.
Sourcing Workable Rent to Own Equipment Finance
We has connections with a number of lenders that offer this type of loan. No need for you to spend your valuable time doing the rounds of banks and lenders – just contact us. Let us know your requirements with details of the equipment and your business and we’ll provide you with the details of the lenders that fit your criteria.
Connect with us for lenders to discuss a great Rent to Own equipment financing deal.