Key points:
• Offer to Hire is when the lender purchases the asset and then ‘hires’ it back to the customer
• The client must hold an ABN, ARBN or ACN
• The product must be primarily for business purposes
• Once the final instalment has been paid the ownership of the asset is transferred automatically to the customer.
| DETAIL | |
| Purpose | Finance for companies and business professionals who need motor vehicles, trucks, earth moving, agricultural, industrial plant or professional equipment. |
| Term | Minimum of 12 months to a maximum of seven years. |
| Minimum amount financed | $7,500 |
| Age of asset | Motor vehicles – maximum age of 12 years at end of loan term (17 years for Tasmania).
Other equipment – age limit based on type of goods and intended use. Please refer to your broker manager for more information around other goods age. |
| Interest rate | The interest rate is fixed for the duration of the loan. |
| Payment frequency | Monthly, quarterly, semi-annual, annual, seasonal or irregular. |
| Payment methods | The preferred method is direct debit. Other options include periodical payment from a nominated account and BPAY®. |
| Deposit | Customers can make a deposit, or a deposit may be an approval condition. |
| Can insurance, fee and charges be financed? | Yes |
| Balloon/residual value | Balloon payments are optional on contract terms up to five years. |
Benefits to the client:
• While the legal ownership of the asset rests with the lender during the contract period, the client can enjoy all the benefits of full ownership of the asset. This is known as quiet possession.
• Preserves ‘working capital’—no deposit, 100 per cent finance.
• Easier cash flow management—payment terms can be matched to income flows.
• Item being financed is normally sufficient security for the finance and, therefore, won’t tie up other assets.
• Customer may be able to claim taxation benefits.
Related Service: Novated Finance Lease Broker in Perth for Car or Motor Vehicles