Commercial hire purchase lets you hire an asset with the intention to own it at the end. Straightforward structure, clear ownership path, potential tax benefits.
Key features
*Tax benefits subject to individual circumstances. Consult your accountant.
Commercial hire purchase (CHP) is a finance arrangement where you hire an asset from a finance company with the intention to purchase it at the end of the agreement. It's a straightforward "rent-to-own" structure.
Throughout the hire period, ownership progressively transfers to you. You have full use of the asset, and once the final payment is made, you own it outright with clear title.
With chattel mortgage, you own from day one. With hire purchase, ownership builds progressively over the term. This affects when you can claim GST and depreciation—speak to your accountant about which suits your situation.
Finance company purchases the asset. You take possession and begin payments.
You make regular payments. Ownership equity builds with each payment.
Pay the final instalment (or balloon). Full ownership transfers to you.
Asset is yours outright with clear title. No further payments.
A simple three-part arrangement between you, the vendor and the finance company.
The finance company purchases the asset from the vendor on your behalf and becomes the legal owner during the hire period.
You take immediate possession and use of the asset, making regular hire payments over the agreed term (typically 1-7 years).
After the final payment, ownership transfers completely to you. The asset is yours with clear title—no further obligations.
Why businesses choose commercial hire purchase for asset acquisition.
Hire purchase is one of the simplest asset finance structures. Clear terms, predictable payments, defined ownership path—easy to understand and manage.
The interest component of your hire payments may be tax deductible as a business expense. Consult your accountant for advice on your situation.
As ownership builds, you may be able to claim depreciation on the asset. Your accountant can advise on timing and amounts.
Include a balloon payment to reduce monthly instalments. Pay it out at the end, refinance, or trade in—your choice.
If you're not GST-registered, hire purchase may suit better than chattel mortgage since you don't miss out on upfront GST credits.
Unlike operating leases where you return the asset, hire purchase always ends with you owning it. No surprises, no residual value negotiations.
Hire purchase suits certain business situations particularly well.
If you're not registered for GST, you don't benefit from chattel mortgage's upfront GST credit. Hire purchase may be a better fit for your tax situation.
If you definitely want to own the asset at the end (not return it like an operating lease), hire purchase guarantees that outcome.
Businesses that prefer straightforward arrangements with clear terms. No complex structures—just hire, pay, own.
Balloon payments can significantly reduce monthly outlays. Good for businesses that prefer lower regular payments with a lump sum at the end.
Most business assets can be financed via commercial hire purchase.
Cars, utes, trucks, vans
Manufacturing & industrial
Computers, servers, IT
Healthcare equipment
Earthmoving & building
Farming equipment
Fitouts & furniture
Kitchen & catering
From enquiry to ownership—here's how it works.
Share what asset you need and your budget.
We confirm hire purchase suits your situation.
We compare 60+ lenders for the best deal.
Fast approvals—often same day pre-approval.
Take possession and start using your asset.
Quick answers to common questions.
With chattel mortgage, you own from day one and claim GST upfront. With hire purchase, ownership builds progressively and GST is claimed on payments. Non-GST businesses often prefer hire purchase.
Yes. A balloon reduces your monthly payments. At the end, you pay it out, refinance, or trade in. Many businesses use balloons for cash flow management.
The finance company is the legal owner until the final payment is made. However, you have possession, use and responsibility for the asset throughout.
Yes, you can usually pay out early. There may be early termination fees depending on the lender and contract terms. We can advise on your options.
Similar concept, yes. You hire with the intention to purchase. Unlike operating leases (pure rental), hire purchase always ends with you owning the asset.
You make the final payment (including any balloon) and ownership transfers to you with clear title. You'll receive documentation confirming the finance is discharged.
Let's find the right hire purchase arrangement for your business—simple structure, competitive rates, clear ownership path.
Or email hello@mortgagefinanceadvisory.com.au
