Under a Commercial Hire Purchase (CHP) or Asset Purchase, AFS agrees to purchase a car or commercial vehicle on behalf of your business which contracts to pay hire charges for a fixed period, at the end of which, the legal title to the vehicle passes to your business. Until all the hire charges have been paid, legal title remains with the owner, AFS.

The payments of a Hire Purchase can be structured by varying the level of deposit and/or making balloon payments either during or at the end of the Agreement. A Hire Purchase also provides a business with the ability to purchase the equipment at any time during the term of the agreement.

Unlike a Finance Lease, where the full amount of the lease rental is tax deductible, only the interest component of the payments and the depreciation on the goods are tax deductible.

 

An Asset Purchase is suitable for companies, partnerships and sole traders who account for GST on an Accruals basis, and individuals using the vehicle for business purposes.

If your business is registered for GST, you can apply Input Tax Credits to claim some or all of the GST contained in the purchase price of the vehicle. Businesses using Accrual accounting can claim the GST as a lump sum on their next Business Activity Statement (BAS), whereas those using Cash accounting can claim the GST by instalments over the term of the contract. GST is not charged on the monthly repayment or on the balloon (final instalment) amount. Where the vehicle is used for business purposes, the business can claim depreciation up to the depreciation limit and interest charges on the contract as a tax deduction.

Hire Purchase Essentials

6.45%

Fixed Rate Commercial Hire Purchase for a new vehicle or truck#

Benefits of a Hire Purchase:

  • Preserve Cash Flow: Preserves the existing cash and credit facilities of your business. Funds can either be invested in more productive areas of their business, or maintained to take advantage of an unexpected business opportunity.
  • Specific Asset Security: The Hirer does not have to tie up additional business and/or personal assets as security.
  • Finance Additional Costs: Other costs associated with the purchase can be financed on the contract such as comprehensive insurance, registration and on-road costs.
  • Reduce Exposure: Ability to hire less than the total invoice price of the goods by way of deposit.
  • Fixed Cost Contract: A fixed rate and term make for accurate budgeting and also provides a hedge against market fluctuations.
  • Flexibility: Hire charges can be specifically structured to suit the business' cash flow. A larger final payment called a Balloon Payment can be structured to reduce the regular monthly rentals, improving the cash flow of the business and making the vehicle more affordable.
  • Tax Treatment: The interest component of the payments and the depreciation on the goods are tax deductible if the asset is used to generate assessable income.
  • GST: If the business is registered for GST on an Accrual basis, it can claim the GST as a lump sum when the next BAS return is lodged. GST is not charged on the on the repayments or on the balloon.

# Commercial rates are only available for novated leases or businesses with a registered Australian Business Number (ABN) and where the goods being financed are predominantly for business use. Interest rate only applicable for new goods that have not been pre-owned and where the applicant has an established good credit history. Finance subject to approval, including the application of applicable lending criteria. Terms and Conditions apply. Fees and Charges are payable. Credit provider is Automotive Financial Services – Australian credit licence 383762. 

Fixed Rate Loan - Commercial Hire Purchase

from
6.45%
p.a# 

Interest Rate
30% to
60%
of Purchase Price

Balloon Amount

1–5
years

Loan Term
$15,000
to
$100,000

Loan Amount

Monthly

Repayment Frequency

Fees

Fees that will apply on settlement

The following upfront credit fees and charges are payable to AFS on the settlement date of the loan.  They are only payable if you proceed with the loan and are included in the loan amount.

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FEE TYPE DEFINITION AMOUNT
Establishment Fee Represents the reasonable cost for AFS to provide the loan to you $395
Credit Search Fee Represents the reasonable cost for AFS to conduct the necessary credit bureau searches per applicant $6.37
Security Registration Fee Represents the reasonable cost for AFS to register our financial interest in the goods $8

The following fees and charges are payable to AFS during the term of the loan.

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FEE TYPE DEFINITION AMOUNT
Monthly Administration Fee Represents the reasonable monthly cost for AFS to administer your loan whilst active $10

The following fees and charges may become payable to AFS during the term of the loan.

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FEE TYPE DEFINITION AMOUNT
Early
Termination Fee ##
Represents the fee that will be payable when you pay out your loan contract in full before the expiration of the term of the loan. The amount of the fee as at the disclosure date is the early termination fee percent applied against of the interest rebate if the loan contract is paid out anytime after the settlement date. 30% of the interest rebate
Dishonour Fee Represents the reasonable cost for AFS to process the dishonour of a loan repayment on each occasion $12
Repayment Book Fee Represents the reasonable cost for AFS to generate and issue a new repayment book on each occassion $35

Fees and Charges disclosed above are current as at 1st July 2016 but may change from time to time. Other fees and charges may be payable. Please review the fees and charges detailed in the pre-contractual statement for the specific loan or lease that you have chosen.

# Commercial rates are only available for novated leases or businesses with a registered Australian Business Number (ABN) and where the goods being financed are predominantly for business use. Interest rate only applicable for new goods that have not been pre-owned and where the applicant has an established good credit history. Finance subject to approval, including the application of applicable lending criteria. Terms and Conditions apply. Fees and Charges are payable. Credit provider is Automotive Financial Services – Australian credit licence 383762.

## Only applicable for the AFS Asset Purchase product. Please read the relevant product Terms & Conditions and pre-contractual statement (if applicable) if you are considering another loan product or lease.

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How to apply

 

Applying for a business loan online is fast and easy with AFS.

What's more there are no fees or charges payable to apply, even if you're approved!. Fees and charges are only payable if you decide to proceed with the loan.

Simply select any "Apply Now" button to get underway.

What to expect

STEP 1

Allow 10 minutes to complete your application online


STEP 2

Once you have submitted the application, you will receive an email notification advising you that we have receive your application and commenced the assessment process


STEP 3

You will also receive a number of disclosure documents by email. Please read these and save them for future record


STEP 4

We will respond to you within 2 working days:

  • To advise you of the application outcome once we have assessed your application and  verified all the information you have supplied
  • To obtain further information in order for us to complete processing your lease

STEP 5

If you don’t have all the information you need you can save a partially completed application and return to it, within 14 days, to complete the required information. We will issue you a secure login and password to the email address you supply us.