A fixed charge over the asset is registered on the ASIC report of the borrowing entity/company, which has to be paid out in full, and removed by the lender, prior to future sale of the asset.
- Tax ownership of equipment with lessee – therefore allowing the lessee to claim GST back in full in next BAS statement (as if the item was paid for in cash).
- No stamp duty payable on monthly payments
- Flexibility and ownership as per CHP
- Less expensive method of financing higher value capital equipment items
- Relatively high establishment fees/legal fees/documentation
- Stamp duty is payable up-front. It is calculated at 80 cents per $200, based on the amount financed
- Only cost effective for larger transactions – a relatively expensive product for less expensive items (< $50,000)