A Truck Lease also referred to as a lease or business lease, it may suit those businesses who wish to have an Off Balance Sheet style of funding. You are not the owner of the Truck so the value of the Truck will not be entered on your balance sheet so neither will the contingent liability.
The Truck Lease Provider. will buy the Truck on your behalf, and you will lease (rent) the Truck back from them for a predetermined term, monthly repayment and residual. Residuals amounts are predetermined and are set using the guidelines of the ATO and will depend on the age and use of the Truck leased.
Truck Lease Key Features
- Flexible Terms You can run a Truck lease with terms of 1-7 years.
- Fixed Residual A residual may be compulsory, this residual is set by the Truck lease provider and is calculated using the ATO depreciation guidelines.
- Repayment Options You can choose to structure a repayment schedule that suits. This could be monthly, Quarterly, Bi-Annually, or Yearly.
- You can claim the entire or just a portion of the lease repayment as a business expense, depending on the percentage of business use.
- Your Truck Lease Repayments will attract a GST charge as will the residual
- You Will Make Repayments on the purchase price minus GST. In other words you do not finance the GST at the time of setting up the lease but it is still paid for you.
Truck Lease Terms
Truck Lease Terms range from 1 to 5 Years, repayments are generally made in advance and can be made monthly, quarterly, bi-annually, or yearly.
Truck Lease, Tax & GST
With a Truck lease You can claim the full cost of the monthly leasing or rental payment. The monthly payments will attract a GST charge as will the residual payment. These Tax Input Credits will be claimed with your regular BAS. You do not claim depreciation or interest as you are not deemed to be the owner of the Truck.
Truck Lease Summary
A Truck lease may suit those who seek a simplified method of accounting, as depreciation and interest do not have to be calculated, or for those who are want to have an ‘off balance sheet’ style of funding. Be sure to investigate Chattel Mortgage and Commercial Hire Purchase options as well as Leasing options. You may well find that costs over the entire term of the loan are similar for the various facilities, if the term and residual are the same. However with leasing the amount borrowed is fixed and so is the residual, this could result in a higher overall cost, if your monthly budget allows for a higher repayment than the lease dictates. You may be able to borrow a smaller amount or have a lower residual and have greater savings with a Chattel Mortgage or CHP. Attention again should be paid before signing a contract, that the term of the loan, the residual value and the monthly repayments are in line with your short and long term requirements.
Why use Equipfin?
Equipfin is part of the Platform Finance Group of companies who will finance over $1bn worth of Vehicles, Trucks, Boats, Equipment and Machinery this year! Due to this volume and buying power, we can give our clients access to the best personal loan rates and financing products across Australia.
Need More Information
Call Us Now on 1300 959 144 or simply email us at [email protected] we will give you an immediate approval indication and have your loan underway in no time at all!